Nearly half of LPG users in sub-Saharan Africa are now spending more of their income on cooking fuel, write Efcharis Sgourou and Matt Scotland
The Mideast Gulf LPG supply crisis is disrupting access to LPG as a clean cooking fuel among some of the world's most vulnerable people, meaning many will turn back to more harmful fuels without targeted policy action, the IEA has warned.
Around 3.4bn people across the developing world rely on LPG for cooking, putting them in a precarious position because of supply shortages and surging prices, the IEA says in a recent report. The effective closure of the strait of Hormuz, through which around 30pc of global seaborne LPG trade transits, has sharply reduced supply and pushed international prices up to record highs.
The nascent LPG markets of sub-Saharan Africa are particularly exposed despite their limited dependence on Middle Eastern supply — more than two-thirds arrives from the US — because of surging import costs and household consumers' low wages. Markets that lack price regulation are especially exposed by volatile international benchmarks, the IEA says. Around 45pc of LPG users in sub-Saharan Africa are now spending a higher share of their income on cooking fuel, with one in eight seeing costs increase to more than 10pc of their income, the report finds.
"Emerging evidence suggests that rising LPG costs are already weakening sustained use and increasing the risk of fuel stacking or reversion to traditional fuels [like firewood or charcoal]," the IEA's energy analyst for Africa and co-author of the report, Marina Petrelli, says. Although data on the current crisis remains limited, "without mitigation, recent price increases could reverse some of the progress made on clean cooking access", she says.
Governments in the near term need to release emergency oil stocks and boost domestic LPG output where possible, as well as prioritise household cooking over industrial use, the IEA says. They should also look at introducing price caps, subsidies and tax cuts to maintain affordability, as well as fuel rationing, supply prioritisation and fuel switching measures, Petrelli says.
"[Valued-added tax] removal or price regulation varies significantly across countries... but they are often the first measures considered as they have the advantage of being relatively straightforward to implement, requiring less administrative capacity than more targeted support schemes." Petrelli says.
The report notes the lack of strategic reserves in countries with cooking fuel markets, highlighting the need for investment in new LPG storage infrastructure to protect themselves from future crises and strengthen supply security. Few major consuming regions have storage capacity covering more than 75 days of demand, while sub-Saharan Africa holds storage equivalent to 33 days of consumption that is concentrated in a few countries. Accelerating the adoption of electric cooking can also help to lessen dependence on LPG imports, the IEA says.
Refugee camps in peril
A separate report from non-governmental organisation Acaps has also highlighted the impact the supply crisis is having on refugee camps where LPG is used for cooking. In Bangladesh's Cox's Bazar refugee camp, where more than 1mn stateless Rohingya refugees are based, LPG has been used in place of firewood since 2018. The country received 90-95pc of its LPG imports via the strait of Hormuz, putting these consumers at risk of fuel shortages at camps that are unable to pay higher prices, Acaps says.
Addressing these issues requires targeted policy responses. The IEA has created a tool to assess how clean cooking policies affect household affordability and government finances. "Our tool is designed to guide countries in navigating these trade-offs, notably by assessing the impact of tax reforms, which can offer immediate price signals to support uptake while longer-term efforts focus on strengthening the capacity for targeted support," Petrelli says.
