Challenges Involved in Field of Domestic LPG Marketing

Worldwide experience shows that it is extremely difficult to use subsidies to induce the poor to switch to kerosene or LPG for cooking. The task is virtually impossible where free biomass is available and time is unconstrained because of the absence of income generating opportunities. Add to this, the higher start-up cost of LPG and it's higher price relative to kerosene or charcoal, and LPG is out of reach for the poor. Kerosene merits special consideration because it is used for lighting by the poor. Where an indigenous source of natural gas exists as in some parts of India, it can be far cheaper than LPG or kerosene. Targeted subsidies are also easier to construct, because it is more difficult to "divert " natural gas piped to the household than it is to divert kerosene or LPG. Its greatest drawback is the fact that it is primarily viable only for urban and peri-urban areas, because laying down distribution networks to rural areas would in most cases be prohibitively costly.