Limitations:

There are several major barriers to wider use of LPG by rural and urban households:

  1. Supply and distribution of LPG: Setting up LPG distribution entails a large investment by oil companies. In many countries, there is limited storage and/or transport capacity among petroleum companies for LPG. Before LPG sales can occur, there must be central storage facilities to hold LPG gas for distributors (i.e. at the port). As well, there is usually need for specialised haulers or pipeline to distribute the gas in the country and facilities to refill canisters regionally.
  2. Price of canisters: Low-income households often cannot afford to make the up-front investment in canisters. Companies (and projects) have got around this problem by (1) introducing smaller canisters and (2) by subsidising the canister. Most companies realise that subsidising the price of the canister for the end-user will enable the company to sell enough gas in the long term to recover the subsidy cost.
  3. Price of appliances: Price of appliances may also prevent low-income families from accessing LPG gas. In Kenya, subsidised canister comes complete with burner for $25. Duty and tax relief for appliances meant for low-income people may also help in this regard.
  4. Different types regulators: Varying types of regulators prevent competition in the market and restricts customers to using one brand of LPG. For example, if their stockist is out of canisters, they cannot go to another, because it uses a different regulator. In West Africa, Governments have standardised on a single regulator type throughout the region to prevent this problem. Policy efforts like this enable smooth growth of the market.



Return to previous page