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REGULATION OF PETROLEUM


Petroleum Act Cap 116 provides for the regulation of import, transport and storage of petroleum.  The Act gives the Minister power to make rules and therefore the import/transport and storage of petroleum is largely governed by the rules which have been made under the Act.  There was an attempt in 2002 to introduce amendments into the Petroleum Act and this resulted in the Publication of a Petroleum Bill March 2002 which proposed changes with regard to the standards to be met by those who transport, store or otherwise deal in petroleum products.  The bill was not presented for debate and when parliament was prorogued in October of 2002 the Bill basically collapsed and has not been enacted.

The rules divide petroleum into class ‘A’ petroleum and class ‘B’ petroleum, Class A petroleum has a flashpoint of 73 o Fahrenheit, if the petroleum is got a flashpoint of over 73 degrees Fahrenheit is class B.  the flashpoint is the point at which that petroleum would cash fire.  Petroleum that has a flashpoint of 73 can catch fire very easily because it is very low.

A licence is necessary for the transport of petroleum by road and the licence authorises the transport of petroleum in the vehicles and within the area which is specified in the licence.  On the licence will be endorsed the times during which the petroleum may be transported,  the places at which the vehicles transporting the petroleum may be packed, the requirement to notify the licensing or other authority of the intended transport of petroleum if the licensing or other authority considers such notification necessary in the interest of safety.

Where petroleum is transported not in bulk, then the following conditions shall apply:-

(a)          Every vehicle which is carrying petroleum not in bulk shall be strongly constructed with sides and back of adequate height. 
(b)          The vehicle shall not carry other goods of an inflammable nature or passengers.
(c)          The vehicle shall not remain stationary for more than 30 minutes within a 100 yards of any building.
(d)          The vehicle shall exhibit inconspicuous character the words, motor spirit, kerosene or other similar words indicating the nature of the contents.
(e)          While engaged in the transport of petroleum the vehicle shall be constantly attended by a at least one person.
(f)           The vehicle shall carry at least one fire extinguisher;
(g)          No petroleum shall be loaded into or discharged from the vehicle between the hours of sunset and sunrise or while the engine is still running.
(h)          No person shall smoke, strike a match or carry any naked light while in or near a vehicle that is carrying petroleum.

Rules with respect to the receptacle, these are the rules:-  The receptacle for conveying petroleum not in bulk shall be

(a)          strong metal receptacle which is so constructed, secured and closed as not to be liable to become defective, leaky or insecure in transit;
(b)          It shall be packed so as not to project beyond the sides and back of the vehicle;
(c)          If it contains Class ‘A’ petroleum it shall exhibit the words motor spirit, petrol or similar words indicating the nature of the contents;
(d)          If it contains class ‘A’ it shall have an airspace of not less than 2.5% of its capacity for expansion and construction.

Petroleum that is in bulk shall not be transported by road and in Kenya it is transported either by train or through the pipeline. With regard to storage of petroleum licences are necessary for the storage of petroleum and a person shall not within a municipality or township store class A petroleum in any building the sides or roofs of which is wholly or mainly constructed of inflammable material. Petroleum which is in bulk shall be kept in an installation or in an underground kerbside tank.

The Petroleum Bill was designed to change the requirement for underground storage of petroleum which is in bulk.  It was motivated by the fact that underground storage of petroleum in bulk requires significant capital outlay. It is expensive.  The consequence is that the Petroleum Industry in Kenya has been dominated by the major petroleum companies.  Entry into the retail of petroleum has been inhibited by the expense involved in providing for storage facilities and in an effort to liberalise the market it was thought that these should be changed.  There was a big dispute about this.  The big companies took the view that this would result in a compromise on safety, the small players argued that the standards were basically protecting the multinationals, in the end many players have entered the market some of whom have not made any investments in the market.  There are a number of companies who have come in the market and they are actually complying with the standards.

Petroleum not in bulk shall be kept in a storage shed. 

The application for the grant of a licence shall be accompanied by specifications and plans indicating
1.    The premises to be licensed giving particulars of the material and construction of each building;

2.    The position of the premises in relation to adjoining property including distances from neighbouring buildings.

3.    In the case of an installation the position and capacity of or tanks, storage sheds and filling stations.  in the case of an installations, the plan that you submit with the application should show the position of all buildings, structure or other works and the manner in which the petroleum is to be stored.

4.    All lighting arrangements including the position of electric cables, switches and fuse boxes, the drainage system, water connections, fire hydrants and fire fighting appliances.

5.    No alterations in the licensed premises or in the method of storing petroleum shall be made without the authority of the licensing officer.

A license to store petroleum within a municipality or a township shall be granted unless the local authority has approved the site.  Further the license shall not be granted unless the plans and specifications have been approved by the Minister or his representative.

No person shall in or near the storage shed or installation do any act which is likely to cause fire.  An adequate supply of dry sand or earth shall be kept ready for use in an installation and in or near a storage shed for the purpose of extinguishing a fire.  Petroleum shall not be allowed to escape into any drain, sewer, harbour, river or watercourse.

Goods of an inflammable nature other than the licensed petroleum shall not be kept within the installation except as are necessary for the purpose of installation and they must be stored in the manner indicated in the specifications and plans attached to the licence.

With regards to kerbside tanks – where the tanks are entirely below the service of the ground, they shall be covered to a depth of 12” below the ground and where in the event of serious leakage there is a possibilities of water supplies, water courses or drainage systems being contaminated, the tank shall be completely surrounded by pladdled clay not less than 12” in thickness or by concrete of a thickness to be approved by the Minister.  The tanks ordinarily are made of steel and the steel has a certain lifespan so what has been happening is that after 50 years the tank begins to leak and that is the leakage that contaminates drinking water.  Most oil companies have the ability to test the tanks and this is not easy as they are buried under the ground.

The pit of a tank which is partially above the ground shall be capable of holding the volume of petroleum which is not less than 5% of the capacity of the tank.  Bunding may be resulted to, to reduce the tank yard area.  Bunding is a safety measure. 

Where the tank is completely above the ground and where in the event of a serious leakage there is the possibility of water supplies, water courses or drainage systems being contaminated, the flow of the enclosure shall be formed of concrete or other material approved by the Minister.  The enclosure itself shall be drained by a pipe fitted with a valve and the valve shall be actuated from the outside of the enclosure.  The valve shall always be kept closed except when actually in use.

No water shall be allowed to accumulate inside the enclosure and the tank itself shall be adequately protected from rust.  All the pumping mains and the pipes shall be furnished with the means of stopping the flow of petroleum from the tanks in the event of an injury to the pipelines.

Every storage shed shall be constructed entirely of non-inflammable material and the doorway and other openings of the storage shed shall be built up to a height of 6” above floor level or the floor sunk to a depth of 6” so that the petroleum cannot flow out of the building in case of its escape from its receptacles.

Finally the licensee shall take all reasonable and proper steps to ensure that the provisions of the rules and the conditions of the licence are known to and observed by all persons employed in the premises and secondly that unauthorised persons do not have access to the licensed premises.

 
 
 

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