Effects of relative pricing of alternative cooking energy sources on their substitution between rural and urban households in Enugu State, Nigeria

Abstract

This study investigated the effects of relative pricing of alternative cooking energy sources on their substitution. The study was conducted in Enugu State Nigeria using primary data collected from two hundred and four households from rural and urban areas of the state, using structured questionnaires. The information collected were pattern and levels of energy use, relative pricing of alternative energies and energy substitution pattern. Data were analyzed using multiple regression analysis and Chow test. Results show that the energy sources used in the rural areas are fuelwood (51.5%) and kerosene (48.5), while those used in the urban areas are fuelwood (30.6%), charcoal (31.6%), kerosene (33.7%) and liquefied petroleum gas (4.1%). There was a relative cross inelastic nature of the energy sources. The price of fuel wood varied inversely and directly with quantities of kerosene demanded in the rural and urban areas, respectively, while the price of charcoal had an inverse relationship with the quantities of kerosene consumed in both urban and rural areas. In particular, policies geared towards subsidizng cost of kerosene and LPG and making them more readily available will lead to reduction in the use of fuelwoods and charcoal in both the rural and urban areas, thereby reducing excessive pressure on our forest and green house gas emission..

Keywords: Energy substitution, energy pricing, forest conservation