A tribunal in Kenya has ruled that the Energy and Petroleum Regulatory Authority (Epra) must pay Sh73 million in compensation to two cooking gas firms, Crescent Energy Limited and Lubricants Trading Kenya Limited. The firms' premises were shut down by Epra following a deadly explosion in Nairobi in 2024. The Energy and Petroleum Tribunal ordered Epra to compensate the dealers for losses incurred due to the closure of their facilities.
Epra closed a liquefied petroleum gas (LPG) depot owned by the two firms in Kamangu and declined to renew the licenses of two others located in Kikuyu and Ongata Rongai. The closures were due to proximity to residential premises and alleged illegal refilling. The Mradi area explosion in Nairobi prompted Epra to order the temporary closure of LPG storage and filling plants situated within a radius of 200 metres of residential buildings and places of public gathering.
The two firms had petitioned the Tribunal to award them damages of Sh1.9 billion, citing commercial losses, reputational damages, and deterioration of their facilities due to Epra's closure. The Tribunal ruled that the plaintiffs are awarded an aggregate sum of Kenya Shillings Seventy Million (Sh70,000,000) in general damages. Crescent Energy Limited was also awarded Sh3,004,000 for the established loss of weighbridge income.
Epra was also ordered to undertake a fresh inspection of the duo's depots in Kikuyu and Ongata Rongai and renew their licenses if they meet the safety requirements. The energy regulator closed the two depots in February 2024, citing proximity to residential areas. The license for the depot in Kikuyu expired in March 2024, while that for the Ongata Rongai facility lapsed three months later.
The location of LPG depots close to residential areas and illegal refilling is a major headache for Epra, largely due to deadly incidents that have led to fatalities and put the regulator on the spot. Currently, Epra requires that LPG depots and refilling stations be located at least 200 metres away from residential areas. Those in breach of this condition are closed down.
The Mradi explosion in December 2024 killed at least 10 people, injured hundreds, and burnt several houses and shops in the populous neighborhood. The incident brought to the fore the risk posed whenever LPG depots are located close to residential areas. The owner of the Embakasi gas plant was charged with manslaughter in connection with the explosion.
The tribunal's ruling is a significant development in the ongoing efforts to regulate the cooking gas sector in Kenya. The sector has been plagued by safety concerns, and Epra has been working to ensure that all facilities meet the necessary safety standards. The ruling also highlights the need for Epra to balance its regulatory role with the need to protect businesses and prevent undue hardship.
Key points
- - A tribunal has ordered Epra to pay Sh73 million in compensation to two cooking gas firms. - The firms' premises were shut down by Epra following a deadly explosion in Nairobi in 2024. - Epra was also ordered to undertake a fresh inspection of the duo's depots and renew their licenses if they meet the safety requirements.
