World Energy Outlook 2007

75% of India’s residential demand for LPG. Rural households account for 92%
of India’s residential use of biomass. While rural households make up over 70%
of the population, they account for only 42% of the residential demand for oil,
gas and electricity.
Biomass consumption in rural households grew at an average annual rate of
1.1% in 1990-2005, but growth is projected to slow to 0.5% per year in 2005-
2030, as per-capita incomes expand and the availability of LPG increases. It
will not decline, however, because, except for some local scarcity, biomass
resources are readily available and are often preferred. Even as per-capita
incomes rise, the use of biomass could actually increase, as households cook
more meals per day. Moreover, although, in 2030, there will be more rural
households relying on LPG as their primary fuel for cooking than today,
biomass will still be used as a secondary fuel. Kerosene is used primarily for
lighting in rural households (Box 16.5), and demand is expected to decline by
1.4% over the Outlook period. LPG consumption will increase by 5% per year,
but in volumetric terms it will still be less than half of total LPG demand in
urban households in 2030 (Table 16.4).
Box 16.5: Kerosene Use in Rural Areas of India
Most rural households in India depend on kerosene lamps for lighting.
Kerosene prices are controlled by the government and are heavily
subsidised. About 90% of rural kerosene is distributed through a public
distribution system (PDS), comprising state and district level officials,
wholesalers and retailers (fair-price shops). The Ministry of Petroleum and
Natural Gas fixes a quota for each state, according to historical patterns of
supply (rather than actual demand or relative poverty levels). A blue dye is
added to the kerosene supplied by the PDS to discourage its misuse, for
example, for transport. Private operators are free, without constraint, to
import and sell kerosene at market prices.
In rural Rajasthan, an estimated 80% of households use kerosene for
lighting (Rehman et al., 2005). Even among households reporting use of
kerosene for cooking, in most cases it is used simply to ignite a biomassfuelled
stove. Most meals require baking and not direct heat, so people
prefer to use traditional mud stoves. Cooking with kerosene also
contaminates food, deterring households from using it. Nevertheless, the
current kerosene subsidy scheme is linked to the use of LPG. Subsidised
kerosene supply has been limited where households enjoy the use of LPG,
primarily for cooking: households with a single LPG cylinder are entitled to
half the normal quota of kerosene, while those with two cylinders are not
allowed to buy any kerosene through the PDS.
478 World Energy Outlook 2007 - INDIA’S ENERGY PROSPECTS