Modelling Demand for LPG in Ghana
OPEC ENERGY REVIEW, Forthcoming
Posted: 3 Feb 2014 Last revised: 4 Feb 2014
Date Written: February 2, 2014
Gas is fast becoming an integral component of the energy mix in Ghana and holds huge prospects for the future. However, there is still great uncertainty surrounding the size of this potential market and often results in supply shortfalls. The recurrent shortages in the supply of LPG for domestic and industrial consumption poses a great challenge to the goal of promoting access and utilization of modern and efficient energy to engender sustainable development in Ghana. As a result, this paper investigates the long run and short run demand drivers of LPG in Ghana and presents a 10-year forecast of future trends in the demand using the ARDL and PAM techniques. Results identify income, price and urbanization as the main drivers of demand. Projections from all three scenarios reveal that demand for LPG will reach a minimum of 5.9 million metric tons by the year 2022. This result has serious implications on both demand and supply side management and thus, calls for stringent efforts to attract the requisite infrastructure to ensure stable and reliable supply of LPG to meet domestic and industrial demands.
Keywords: energy demand, forecasting, Ghana, LPG, Natural Gas
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