| dc.description.abstract | 68% of the energy needs in Kenya are met by biomass energy. Although biomass is a renewable resource, the high rate of its extraction and inefficient utilization renders it a non-renewable, a trend that needs to be reversed. This study was motivated by the need to get an alternative sustainable source of energy as this will be critical in helping the Kenyan economy to become more competitive and dynamic. Kerosene is a fonn of modern source of energy used for cooking, and lighting in households.
This study sort to answer the important questions of what actually determines the demand for kerosene in Kenya and how this demand reacts to changes in the primary determinants. The study Used thirty eight - year time series data over 1971-2009 and the estimated model was a single regression with demand for kerosene as the dependent variable and the explanatory variables being price of kerosene, price of LPG, electricity tariff, .urban population and per capita income.
The results of the study showed that lagged kerosene demand and per capita income have a significant impact on demand for kerosene while the rest of the variables have insignificant impact. Both in the short run and the long run kerosene price, LPG price and electricity tariff coefficients had the correct sign though insignificant and they can be termed as inelastic. This reflects that economic units are not able to exercise their discretion in fuel and equipment choice in the long run. The insignificance of these coefficients reflects the inefficiency in the petroleum sector and the oligopolistic structure in the sub sector.
The findings are important because they form a strong foundation for the development of appropriate policies in management and regulation of the petroleum sector. In particular, there is need for the government to address these inefficiencies in the energy sector and facilitate competition in the sector. | en_US |
