CLEANER COOKONG CAMP Presentation Quantitative and Qualitative Market Research on Liquefied Petroleum Gas in Malawi (Supply and Demand) CLEANER COOKONG CAMP Presentation by ADMORE CHIUMIA Funded by the Protecting Ecosystems and Restoring Forests in Malawi (PERFORM) activity of the United States Agency for International Development (USAID Malawi )

Introduction Use of biomass energy (charcoal and firewood) has increased: 95% in 2014. Consequences Deforestation: estimated 75000 hectares of natural forest across Malawi destroyed Undermining agricultural productivity and food security Undermining hydroelectric power generation

Introduction cont’d A “rapid scan” done under the National Charcoal Strategy to ease pressure on charcoal and firewood identified Liquefied Petroleum Gas (LPG) Market assessment on LPG in Malawi constitutes a major follow up

Objectives Broad objective: Assess the potential for an LPG market in Malawi Specific objectives: Understand feasibility of LPG market in Malawi Analyse the demand and supply dynamics of LPG in Malawi Identify and analyze barriers to development and expansion of LPG market in Malawi Provide specific and actionable recommendations

Methodology Targeted respondents: Geographical coverage: Consumers ( households and institutions) Suppliers Regulators Geographical coverage: North:Mzuzu, Mzimba and Karonga Centre: Lilongwe, Kasungu and Salima South: Blantyre, Zomba and Mangochi

Methodology Cont’d Sampling techniques Demand-side: Purpose sampling Supply-side: All major suppliers Regulators: All regulators Sampling size for demand side actors Households: 332 (300) Institutions: 81(45)

Methodology Cont’d Data collection instruments Household questionnaire Institutional questionnaire Key informant interview and In-depth interview guides Case studies

Demand-side Results (Households) Use of LPG Users: 47% Non-users: 53% Awareness of existence of LPG among non-users Aware: 74% Not aware: 26%

Demand-side Results (Households) cont’d

Demand-side Results (Households) cont’d

Demand-side Results (Households) cont’d

Demand-side Results (Households) cont’d

Demand-side Results (Households) cont’d

Demand-side Results (Households) cont’d

Demand-side Results cont’d

Demand-side Results (Households) cont’d

Demand-side Results (Institutions) cont’d

Demand-side Results (Institutions) cont’d

Supply-side Results Number of Suppliers/importers and their geographical presence AFROX: Blantyre, Lilongwe, Mzuzu , and different districts in Malawi Industrial Oxygen : Blantyre, Lilongwe, Mzuzu, Salima Delta Gas: Lilongwe

Supply-side Results cont’d Capacity: very limited Industrial Oxygen: Storage Capacity of 40 tonnes Delta Gas: import 50 tonnes a month Distribution network AFROX: Gasman (Blantyre), Chigodi (Lilongwe), Gas and Gadgets (Zomba), Mzuzu Panel Beaters (Mzuzu) Industrial Oxygen: none Delta Gas: none

Supply-side Results cont’d Time taken to import More than a month to bring a truckload Challenges in importing LPG Advance payments VAT on LPG imports

Results (Regulators) National Energy policy to reduce reliance on firewood to 30% by 2030 MERA is currently involved in raising awareness of LPG through television, radio and the print media Lack of monitoring or enforcement in the LPG sector

Results (Regulators) Cont’d

Willingness to pay (WTP) for LPG: Demand side WTP for LPG from both users and non-users. WTP averaged MK62, 322.00 for all households However, there were differences in the levels of WTP for households with different socioeconomic characteristics

Willingness to pay for LPG Characteristic WTP (MK) Gender MHH 65197 FHH 61957 Income MK50,000-MK200,000 39,311 MK201,000-MK500,000 61,381 MK501,000-MK800,000 66,872 MK800,000-MK1000,000 81828 Above MK1000,000 79958 Education Primary 43,556 Secondary 51,484 Tertially 67,770

Gender participation in LPG related activities Activity Women participation (%) Initial decision to buy LPG 19.9 Paying for LPG 32.7 Cooking using LPG 49.4

Gender perspectives from the suppliers of LPG The study noted the following: LPG involves men, women and children. Unlike firewood, men participate in the purchase and refilling of LPG gas cylinders. Males participation in LPG could be attributed to the fact that LPG is generally associated with people of a certain high social economic class. As much as women are the ones who use LPG, men have a say on how much a household can spend on LPG as such, both men and women should be involved in efforts to promote increased adoption of LPG as an alternative cooking fuel.

Recommendations (Demand-side) Subsidies Increasing distribution network to reduce transactional costs Gradual recovery of cylinder cost

Recommendations (Supply side) Raise awareness about benefits Remove 16.5% VAT and 5% levy Introduce a system that allows cross-filling of cylinders Provide incentives to reach rural population