Govt looks to lower LPG costs

Wednesday November 14 2018

LPG

Government exempted taxes on LPG but the combined cost of other accessories like cylinder and cooker remained well beyond the purchasing power of an average Rwandan household. PHOTO | Cyril NDEGEYA 

By JOHNSON KANAMUGIRE
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The government is considering offering incentives to makers, suppliers of cleaner cooking solutions in a bid to lower the prices and increase the number of low-income families using cleaning cooking methods.

Currently, the relatively high cost of clean cooking solutions such as gas makes it difficult for low-income earners to use. Instead they continue using traditional cooking methods, in particular firewood and charcoal, which contribute to polluting the environment.

This comes as the country faces a high domestic use of firewood and charcoal for cooking at 84 per cent of all households, putting a strain on the country’s forest cover.

The move follows a recent forum on renewable energy for sustainable growth attended by officials from the government, players in the energy sector and donors, held in Kigali recently, which sought to come up with a financing model that could help makers get resources to expand production and distribute clean stoves nationwide at an affordable price.

Minister of Infrastructure Claver Gatete told Rwanda Today the government had met importers and dealers of LPG gas supply chain to identify what the market situation was at source to better plan how to lower costs for the end user.

While the discussions are yet to determine what the affordable price of LPG and cooking stoves would be against the purchasing power of an average household, Minister Gatete said all they need to do is lower the prices to below those of charcoal or firewood.

“We need to assess all the available technologies and then decide which ones are more efficient so that they can be manufactured here, as well as the collaboration framework that will make them accessible to everyone,” he said.

A mini market survey by Rwanda Today showed that despite the government’s tax incentives on cooking gas, complexities in the distribution chain still make it too costly in the rural areas.

Equally, prices for improved firewood and charcoal cooking stoves remained way beyond the cost of a sack of charcoal and firewood, ranging between Rwf12,000 and Rwf25,000.

The makers, who are largely individuals and small-scale enterprises, decried high production and operational costs in the absence of government support and other market challenges.

These challenges saw local initiatives like the once popular Amizero cooking briquette and Tekutangije struggle to attract users, and have since stopped production.

Ivan Twagirashema, chairman of energy private developers, said that without incentives most initiatives struggle to produce in large quantities, which forces them to recoup their investments through pricing.