Replacing Kerosene Lanterns With Solar Lanterns
by:Masahudu Ankiilu Kunateh
–The Best Way To Mitigate The Poor Against Fuel Price Hikes
The recent 15-20% increased in the prices of petroleum products announced by the National Petroleum Authority (NPA) on Saturday, 16, 2013 has automatically led to the sky-rocketing of the prices of goods and services in the country.
This has generated hue and cry among the Ghanaian populace. The discussions in the media may have created confusion in the minds of Ghanaians but what are the facts?
Masahudu Ankiilu Kunateh witnessed the launch of the nationwide solar lantern distribution project, which aims among things at mitigating the poor against recent fuel price hikes, reports.
THE GOVERNMENT of Ghana commenced the implementation of full cost recovery in the Petroleum Pricing Formula from 2009 till date.
However, the government, upon stakeholder consultations exercised its right to intervene to keep ex-pump prices flat for the good of the people of Ghana and the vulnerable in society.
This intervention, which constitutes various levels of price subsidization on all petroleum products is funded by the government. The accrued under-recoveries are then paid to the Petroleum Service Providers (PSPs).
From 2009 to 2012, a net total of about GH¢1.5 billion had accrued as subsidies due PSPs. Out of this amount, government paid to the PSPs a total of GH¢1.1 billion with about GH¢400 million still outstanding.
For 2013, the under-recovery was projected to be about GH2.5 billion. If the outstanding amount for 2012 was added, then a total cumulative subsidy of GH¢3.4 billion was projected for 2013.
Given government’s growing inability to promptly pay these subsidies and the growing ballooning amounts involved, it was prudent that the government reduced the levels of subsidies.
It became obvious that subsidy payments were costing government a fortune, and consequentially stifled other sectors of the Ghanaian economy of developmental funds, especially when the target groups, particularly the poor and the vulnerable found mostly in the rural areas were not benefitting from these subsidies.
According to the NPA, the workout indicates that government has maintained some subsidy on the prices of petroleum products.
But Executive Member of IMANI Ghana, Mr. Bright Simon said the decision will not favour the poor, who will be at the receiving end of paying more, while the rich continue to enjoy subsidy on the products.
Mr. Simons argues the subsidy on the products rather benefits public officials who are supplied fuel freely, while the deprived are made to face the swelling effects.
But the Minister of Finance, Mr. Seth Terkper said government has among others, increased the fleet of buses for Metro Mass Transit to facilitate transportation to and from rural areas at relatively cheaper costs.
The Finance Minister said rehabilitation works on railway lines are ongoing to aid the movement of goods from the hinter lands to the cities at affordable fares.
He said government has also directed Ministries, Departments and Agencies to submit a budget based on which fuel allocation will be made. According to him, those who exceed their quota before the year ends will see their supply cut off, unless they justify the need for it.
Currently, millions of Ghanaians and businesses are today experiencing very erratic and frustrating electricity supply. It is a situation that President John Dramani Mahama was deeply concerned about, and to which he devoted considerable time to.
This is especially because compounding the problem of unstable power supply as an equally worrying issue of unreliable water supply to some communities, he said in his State of the Nation Address last week Wednesday.
Launching the nationwide solar lantern distribution project at Alorkpem near Ada in the Dangbe East Municipality, the new Minister for Energy and Petroleum, Mr. Emmanuel Kofi Buah was quick to add:
“The government is fully aware of the possible impact of the removal of these subsidies, especially from the social products on the population, particularly the rural poor and the vulnerable. It is for this reason that the following impact mitigation measures are being pursued by the government”.
Rural LPG promotion programme
This project involves the distribution of liquefied petroleum gas (LPG) to rural communities in specially designed LPG bottles to be supplied from special distribution centres set up in rural communities.
The Ministry of Energy and Petroleum is working out sustainable modalities to provide subsidy for this project through the Rural LPG Compensation Fund, Mr. Emmanuel Buah hinted.
Installation of Solar panels for off-grid remote and Island Communities
The above project is providing solar panels to rural remote areas especially Island and lakeside communities to help improve community lightening. Thus, reduces the need for kerosene in beneficiary communities.
Up-scaling of the Rural Electrification Scheme
He also revealed: “The ministry is aggressively implementing the rural electrification scheme. A total of about 3,000 rural communities throughout the country are currently being electrified under various projects”.
It is envisaged that by the close of 2013, over 80% of the country will have access to electricity and as the ruling government manifesto promises, the country should achieve 100% universal access by 2016. The progressive extension of electricity to rural communities across the country curtails the need for the use for kerosene.
Solar Lantern Distribution Project
Kerosene remains an essential fuel for lighting in many poor rural homes in Ghana. Children in these homes use kerosene lamps/lanterns to study at night. It is also an important source of light for all manner of night time domestic chores and commercial activities.
Underscoring the significance of kerosene to the social wellbeing of rural households, government therefore, initiated supply and distribution focused programmes that sought to streamline activities along the value chain to bring the product within the reach of the poor and the vulnerable rural households.
Furthermore, government subsidizes kerosene to the princely sum of about GH¢74 million annually to make the product affordable to the poor majority in rural off-grid communities across the length and breadth of the country. In spite of these interventions, kerosene supply to rural areas for lighting has been very erratic as a result of supply shortages and price volatility.
The untended consequences of this policy to subsidize kerosene for the rural and vulnerable people have led to the diversion of the subsidized product for adulteration with diesel and also for other economic uses such as solvent for industrial and commercial activities, including automotive fueling and input for blending bitumen in rural construction.
As a result of these, the product (kerosene) is scarcely available for the target group and many households in off-grid rural areas are compelled to pay higher prices of the commodity which is often retailed for more than GH¢1.20 on a 330ml bottle (coca-cola sized) translating to about four times the ex-pump price of 0.91 Ghana Pesewas per litre.
This phenomenon has led to rural households resorting to the use of dry cell battery operated lanterns. The recent 2010 Population and Housing Census confirmed that in some districts such as Atwima Mponua in the Ashanti Region, as much as 60.9% of households use battery operated lanterns with only 11.4% using kerosene for lighting.
Access to grid electricity for lighting in the same district represented only 26.6%. This is not different from most other rural districts with communities without access roads.
According to another recent rural household energy survey conducted by New Energy and SNV, both civil society organizations in the Gonja District in the Northern Region, only 6% of households reported kerosene lanterns as their main source of lighting while 41% reported dry cell battery powered lanterns as the main source of lighting.
Even though the battery operated lanterns are associated with regular replacement of batteries, they still remain a cheaper option for most rural households. However, the indiscriminate disposal of the dry cell batteries presents serious environmental challenges.
The use of solar lanterns, however, is environmentally friendly as they do not emit hazardous smoke or carbon dioxide into the atmosphere, minimal battery replacement which is very safe for human health and environment, the Energy Minister explained.
Solar lanterns have minimal operating cost as the source of energy (solar) is free and therefore a cost effective way for providing sustainable off-grid light solutions in Ghana.
The annual cost of using kerosene and dry cell operated lanterns are estimated to GH¢ 152.00 and GH¢83.00 respectively, the annualized cost of using solar panels is estimated at GH¢ 15.00.
This notwithstanding, solar lanterns are rarely used on large scale for rural lighting due to the inability of rural folks to raise the upfront cost of about GH¢ 90.00 to purchase a good solar lantern.
The quantum of Government subsidy of about seventy four million Ghana new cedis (GH¢ 74,000,000) on kerosene annually is enough to purchase over 822,000 solar lanterns within one year, while ensuring better illumination and total elimination of smoke exposure to women and children.
Switching to cleaner off-grid lighting solutions at a minimal cost to the consumer is still more economical, environmentally and socially beneficial and reduces the burden of subsidy on the government in the medium to long term.
It is against this background that the Government is launching the solar Lantern Distribution Project as a viable alternative to replace kerosene lanterns as the main source of lighting in poor and vulnerable off-grid rural communities, Mr. Kofi Buah told the well-attended gathering.
The programme he said aimed at providing two hundred thousand (200,000) solar lanterns to replace kerosene lanterns in off-grid homes over a period of five years. This will cost the government over GHC2 million to implement the novelty project.
Mr. Kofi Buah added: “The project will be implemented in three phases. The first phase will target remote communities and island and lake side communities with no access roads over a period of 18 months (Jan 2013 to June 2014). Under this phase, the total of 20,000 high quality solar lanterns of two different models will be distributed nationwide through a trade-in or subsidy scheme”.
That is, households in the target communities will be required to turn-in their kerosene lantern or pay a subsidized fee in cash for the solar lanterns.
The second phase will span a period of two years (2014-2016). The project would support the establishment of local assembly of solar lanterns. A total of 50,000 solar lanterns will be assembled and distributed through a 50% grant subsidy package to ensure a sustainable market for solar lantern promotion in the country, according to Mr. Kofi Buah.
The project would use commercial mass media social marketing concepts to create critical mass demand and awareness of solar lanterns.
The third phase which will span a period of 18 months will see a distribution of 130,000 solar lanterns and with a further reduced subsidy. During the project will continue with the market promotional support for a sustainable market chain development.
The Minister assured the rural folks: “Removing the subsidy on kerosene and redirecting this to the social interventions will not bring hardship as purported by some sections of the people in the media but will bring great benefits to the people for whom the subsidy was meant for.
Besides, the removal of the subsidy will stop the adulteration of the fuel with diesel and thereby making the kerosene available for use in the household”.
Expectations and benefits
He anticipated that the end-user price of the kerosene in these communities would reduce significantly from the current GHC 1.20 per 330ml coca cola bottle.
The other benefits of promoting solar lanterns are Mr. Kofi Buah mentioned include: elimination of the impact of smoke related diseases on the health of children using the kerosene lanterns; mitigate the impact of climate change through the elimination of carbon dioxide emission associated with kerosene lamps; reduce expenditure of rural people on energy for lighting; and build local capacity and create jobs in the assembly and maintenance of solar lanterns in Ghana.
On his part, the Municipal Chief Executive for Dangbe East Municipal Assembly, Mr. Rex Wussah thanked the government for implementing the project, appealing to the government to further speed up the rural electrification project in the area.
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