Assessment of Kerosene Subsidy on Rural Households� Demand for Biofuel in Nigeria: Case of Egbedore Local Government Area of Osun State, Nigeria

The choice of domestic cooking energy in rural Nigeria is an issue for addressing deforestation and health hazards resulting from indoor air pollution. The study compared the demand for different cooking energy sources before and after implementation of kerosene subsidy and determined the correlates of choosing fuel wood/charcoal. The data were collected with structured questionnaires administered to 134 respondents that were selected randomly. Data were analyzed with descriptive statistics and logit regression. The results revealed that the proportion of households that depended on kerosene increased from 47.8% before the subsidy to 61.9% after the subsidy. Also 6.67% of the respondents indicated that kerosene was scarce after the subsidy, as against 41.67% that indicated same before subsidy. The logit regression results revealed that using fuel wood/charcoal as cooking fuel before subsidy significantly reduced the probability of choosing fuel wood/charcoal after subsidy (p < 0.10). As the price of kerosene decreased, the probability of using fuel wood/charcoal significantly decreased (p < 0.10). It was concluded that subsidy on kerosene portends a very high likelihood of leading to reduction in deforestation and indoor air pollution due to less usage of fuel wood/charcoal.