An investigation into the demand for illuminating paraffin and liquid petroleum gas in South Africa
type: CreativeWork
description: This dissertation investigates the demand for illuminating Paraffin (IP) and Liquid Petroleum Gas (LPG) in South Africa, and also tests the energy transition theory. The energy transition process outlines the substitution of fuels that occurs with rural-urban migration. Data on income, IP and LPG prices, demographic trends and IP and LPG volumes are incorporated in models to test the energy transition theory: National and regional projections of demand are derived. Income and price elasticities are derived for testing the energy transition theory, where Engel's Law is applied. The derived price and income elasticities for the regional IP models largely confirm the energy transition process where poorer areas are price inelastic. The models of the urban electrified areas and the predominantly rural areas, produce negative income elasticities which reduce the forecasts and suggest that IP is an inferior good due to the availability of superior electricity or free wood respectively. Electrification will play a role in reducing consumption of IP and LPG. However, it can be concluded that due to the predominant price and income inelasticity of demand, the smooth and exclusive transition from wood to IP and LPG and finally electricity suggested by (Viljoen, 1990) is perhaps misleading. It is more likely that tardiness in substituting one fuel for another will impede the complete transition among fuels and that the use of a range of fuels, even if electricity becomes available, will be maintained for some time as the newly urbanised household moves up the modernisation index. The forecasts for IP and LPG for the period 1992 to 1995, emanating from the econometric models developed here, forecast lower growth in consumption as compared with the recent past. The national forecasts for 1992 to 1995 are half those achieved in the last upturn of 1986 to 1989. LPG forecasts are similarly about 50% lower than the historic period. However, the growth in both products is still forec…
abstract: This dissertation investigates the demand for illuminating Paraffin (IP) and Liquid Petroleum Gas (LPG) in South Africa, and also tests the energy transition theory. The energy transition process outlines the substitution of fuels that occurs with rural-urban migration. Data on income, IP and LPG prices, demographic trends and IP and LPG volumes are incorporated in models to test the energy transition theory: National and regional projections of demand are derived. Income and price elasticities are derived for testing the energy transition theory, where Engel's Law is applied. The derived price and income elasticities for the regional IP models largely confirm the energy transition process where poorer areas are price inelastic. The models of the urban electrified areas and the predominantly rural areas, produce negative income elasticities which reduce the forecasts and suggest that IP is an inferior good due to the availability of superior electricity or free wood respectively. Electrification will play a role in reducing consumption of IP and LPG. However, it can be concluded that due to the predominant price and income inelasticity of demand, the smooth and exclusive transition from wood to IP and LPG and finally electricity suggested by (Viljoen, 1990) is perhaps misleading. It is more likely that tardiness in substituting one fuel for another will impede the complete transition among fuels and that the use of a range of fuels, even if electricity becomes available, will be maintained for some time as the newly urbanised household moves up the modernisation index. The forecasts for IP and LPG for the period 1992 to 1995, emanating from the econometric models developed here, forecast lower growth in consumption as compared with the recent past. The national forecasts for 1992 to 1995 are half those achieved in the last upturn of 1986 to 1989. LPG forecasts are similarly about 50% lower than the historic period. However, the growth in both products is still forec…
author: McGregor, G A G
language: eng
date published: 1992
date modified: 2026-07-22T22:22:51Z
provider: University of Cape Town
publisher: Networked Digital Library of Theses and Dissertations
type: WebPage
source organization: School of Economics

PropertyValue
property ID: Handle
value: http://hdl.handle.net/11427/17349