Competition Authority of Kenya fines gas suppliers Sh400,000 for price-fixing

Cooking gas

A customer shops for cooking gas in Kibera, Nairobi.

Photo credit: Dennis Onsongo I Nation Media Group

A group of 32 players in the energy sector who colluded to fix minimum prices of 6kg and 13kg liquefied petroleum gas (LPG) cylinders have been fined over Sh400,000 for contravening competition laws.

The Competition Authority of Kenya (CAK) found Energy Dealers Association (EDA), a body consisting of 32 small-scale suppliers and distributors of LPG cylinders, culpable of hatching the illegal plot  to exploit Kenyans.

This followed investigations after allegations that the association was engaging in restrictive trade practices.

“The association has paid a financial settlement Sh408,000 which is equivalent to 5 per cent of the relevant annual turnover and undertaken not to engage in anti-competitive conduct.

“Additionally, the EDA committed to implement a competition compliance programme to sensitise its members and their staff about provisions of the Act,” the authority stated.

CAK noted that even though there was no evidence that the players proceeded to implement the proposals, the intent was contrary to Section 21 of the Competition Act, which outlaws restrictive trade practices, including price-fixing.

Restrictive trade practices are any habits used by a player to offer them undue advantage against another while doing business, including colluding to set prices for a product.

In the Friday’s Kenya Gazette issue, the authority stated that following its investigations, the association applied to enter into a settlement agreement, where it was fined Sh408,000.

“Specifically, the association was found to have advocated for enactment of Energy Dealers Association Rules, 2019 with the objective of recommending a pricing formulae to its members.

“This contravenes the provisions of sections 21 and 22 of the Act,” the gazette notice stated.