Zera to impose price controls on LP gas

By Staff reporter | 08 Aug 2019 at 19:26hrs
ZIMBABWE Energy Regulation Authority (Zera) will soon impose price controls on cooking gas in a bid to contain fuel costs for households.

The decision, which was announced at a Zera workshop, will set a price for smaller quantities of liquefied petroleum gas sold in domestic markets.

Zera will also regularise informal dealers as usage of LP gas increases significantly in the country.

Zimbabwe's LP gas consumption is expected to go just above 40 million kgs by year end, due to the high demand exacerbated by frequent electricity outages.

Although, the southern African country's consumption remains below Africa's average LP gas consumption of 3kg per capita (per head) per year,  usage has increased markedly, reaching around 2,5 kg per capita per year.

The authority said it has set a framework to enforce the law and regulate the growing industry, while protecting the over-burdened consumers suffering wanton price increases and arbitrage since prices are not regulated.

"Our gas industry is still in its infancy, so there was no appetite to regulate before because we wanted the sector to get more players," Zera petroleum infrastructure engineer Andrew Guri told the energy workshop in the capital on Tuesday..
"Right now, we have many players, so we already have a structure and framework… and we will also be looking into the pricing.

"The industry is regulated but the prices are not regulated. Prior to 2019, there were self-regulation frameworks and templates are already there…"

The Energy Regulatory Authority Act Cap 13:23 No. 3/2011 prohibits trade in petroleum products without a valid license.
Zera has so far licensed 62 import wholesalers, 383 retailers, 30 LPG installers and given out 32 cylinder permits.

Meanwhile, due to high demand and gross shortages of LP gas, consumers often wait in long queues for hours.
Zimbabwe currently imports LP gas from Zambia, Mozambique and South Africa.

Exacerbating the shortages is lack of foreign currency which has resulted in licensed traders failing to meet the demand in the country, making consumers vulnerable to arbitrage by gas dealers.

Many informal traders nationwide have set up hazardous backyard markets where they sell gas to desperate consumers at a premium.

"Government and National Oil Infrastructure Company (Noic) are developing a plant for LPG where wholesalers will be able to buy and supply gas at ease," Guri said.

He added that the authority will be enforcing LP gas standards in the industry to promote increased access and for safety precautions together with Environment Management Authority (Ema) and the Zimbabwe Republic Police (ZRP).

"Some of the challenges that we have seen include unlicensed filling of LPG cylinders, improper installation of LPG facilities and illegal and improper conversion of cylinders... and we have recorded about five cases of gas fatalities this year," Guri said, urging compliance and regularisation of businesses by gas traders and consumers to observe safety precautions in their domestic use of gas.



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