Charcoal Business Booms As LPG Price Soars


Charcoal sellers and producers are cashing in on the soaring Liquefied Petroleum Gas (LPG) price. The LPG currently hovers around GH¢40 per 14.5 kilogram on the Ghanaian market.

The National Petroleum Authority (NPA), regulator of the petroleum downstream industry in Ghana recently increased LPG price by 8.73 percent in January 2014, as against 3% in June last year.

The surged in the LPG price has compelled many Ghanaians to revert to the use of charcoal and firewood for energy source. Also, subsidies on the price of LPG and other petroleum products in the country were withdrawn last year.

The subsidies used to serve as a measure to get majority of the population to shift from charcoal and firewood to LPG, with the aim of conserving the forests to help mitigate global warming.

These, economists and environmentalists say are defeating the purpose for which government introduced the domestic use of LPG in the 1980s.

Staggering statistics made available from the United Nations (UN) Food and Agricultural Organization (FAO) indicated that about 69% of all urban households in Ghana use charcoal for cooking and heating, and the annual per capita consumption are around 180 kg. The total annual consumption is about 700,000 tonnes, 30% of which is consumed in Accra, Ghana’s capital.

In its report entitled: ‘Woodfuel Use in Ghana: An Outlook for the Future’, the Renewable Energy Division of the Energy Commission, added that bulk of energy supply in Ghana is met from woodfuels notably firewood and charcoal. Woodfuels account for about

71±1 % of total primary energy supply and about 60 percent of the final energy demand.

CHARCOAL IS OUR LIVELIHOODS
http://thechronicle.com.gh/wp-content/uploads/2014/01/Charcoal-off-loading-from-a-truck.jpg Madam Marry Issahaka, a native of Tumu in the Sissala East District of the Upper West Region, who sells charcoal for over five years at North Kaneshie, a suburb of Accra, told the Business Chronicle that ‘of late the charcoal business is profitable than before. Most people come for the charcoal because of the LPG price hikes’.

She said last year she used to make between GH¢30 to GH¢50, but after the announcement of petroleum products early this month, she usually goes home with over GH¢100.

Madam Issahaka, like her colleague charcoal sellers, hope that the market should continue the way it is going.

Looking at her vertically packed bags of charcoal, Madam Issahaka estimated that she was going to get GH¢2000 from the sales. Part of this money will be used to pay the school fees of her four children at primary and secondary levels of education, she told this reporter in Pidgin English.

When quizzed whether she knows that charcoal fire produces carbon dioxide into the atmosphere which depletes the ozone layer, Madam Issahaka answered in the affirmative, but saying that ‘she and her colleague charcoal sellers have nothing to do than the charcoal business’.

Charcoal is now the major source of energy for most homes in the urban centres, including Accra, Kumasi, Cape Coast, Takoradi, Tema, Obuasi, Tamale, and Techiman. So, we have a big market for our products, a Madam Talaata Kuoro, a Darkuman-based charcoal seller stated.

According to her, most rich households in her area turn out in their numbers to buy her charcoal for their domestic use, instead of LPG, which they complain is costly.

Madam Kuoro added her voice to the hundreds of Ghanaian charcoal sellers in the urban centres that government should support them by reducing the prices of fuel to enable them transport their charcoal to the cities at a reasonable lorry fares.

Another charcoal seller, Hajia Habiba told this journalist that previously charcoal usage was for the lower income class, but now the middle and high income people also queue for her charcoal.

MORE CASH IN CHARCOAL
The bulk of wood fuels amounting to 90 percent are obtained directly from the natural forest. The remaining 10 percent is from wood waste that is logging and sawmill residue, and planted forests.

 
The transition and savannah zones of Ghana, mainly the Kintampo, Nkoranza, Wenchi, Afram

Plains, Damongo districts provide the bulk of dense wood resources for charcoal and fire woods.

 
However, wood fuel resources are depleting at a faster rate as a result of unsustainable practices in the production and marketing of the product that incurs high levels of waste. According to the FAO, the rate of deforestation in Ghana is 3% per year.

 
In 2000, the annual production or yield of wood was about 30 million tonnes of which about 18 million tonnes was available and accessible for wood fuels.

 
Furthermore, charcoal producers from the transition to the Savannah zones acknowledged the harmful activities their operations have on the environment, but insisting that they depend on the charcoal production for survival.

 
Fuseini Hamidu, a native of Tamale in the Northern Region, who is into charcoal production estimated that of the total round wood production in Ghana, 91% is used as fuel wood and for charcoal. ‘I have three trucks. Every two days we cart close to a million bags of charcoal to our clients in Accra and Kumasi metropolis respectively’.

He stated: ‘I agree we are losing our forest but the wood serves as the main source of fuel for the poor. I would rather encourage the government through Forestry Commission to intensify its effort that would make sure that loggers replace every cut tree so that we would not end up losing our forest reserves in the coming future’.

After 15 years of production charcoal for residents of Madina and its environs, Kwame Boateng, who hails from Afram Plains, could not fathom living without charcoal production, saying ‘I was able to take care of my five children through tertiary education’ in the country.

 
ECONOMIC TREES RUN
In our line of duty, we do not care about economic trees such as Shea, Dawadawa, Sapele, Wawa and Mahogany, though there are bye-laws enacted by the various Metropolitan, Municipal, and District Assemblies (MMDAs), according to the Charcoal producers.

But officials of the Forest Commission say present and successive governments lack the will power to protect the forest. They mentioned several reasons besides fuel wood that contribute to the alarming depletion rate of the forest.

These include: ‘Illegal mining activities at forest reserves keep degrading lands. Illegal felling of trees and construction of highways through forest reserves has reduced forest resource base’.

FEELING THE HEAT
Some LPG domestic users told this newspaper that the hike in the price has compelled them to go for cheaper charcoal as a source of energy.

Andrew Parker, a chief graphic designer at The Chronicle, like many Ghanaians, is worried that if the LPG price continues to skyrocket, Ghanaians would have no option than to throw their LPG cylinders away and turn to charcoal, as their source for cooking energy.

Imaging that you earn GH¢100 a month and you spend GH¢40 on 14.5kilogram cylinder for some weeks, you will have GH¢60 for feeding and transport, among others, he stated.

An Economist at the University of Ghana, Emmanuel Nii Abbey, shared the same sentiments expressed by Mr. Parker and several Ghanaians.

 
He questioned: ‘How is such a person going to cope with the GH¢60? It is going to be difficult… but mind you … the use of the GH¢40 LPG may stretch over a month … and comparatively … such a household will stop buying LPG, but rather charcoal or firewood’.

 
George Yeboah, a public servant who works at one of the ministries, says he stopped using LPG for cooking since 2012 because of the price.

 
When the newspaper visited some LPG filling stations in the capital, Accra, station attendants say the sales are not as encouraging as it used to be. The consumers are complaining about the price hike, a station attendant at Alajo gas filling station stated.

 
 
FUEL SUBSIDIES
Mr. Emmanuel Nii Abbey, the young talented Legon-based economist believes removing subsidies was the trigger, in addition to the rising prices of LPG and other petroleum products on the international market.

 
He stated: ‘This defeats the original intent for people to stop using charcoal, firewood, etc

Of late most homes are going for charcoal because of high LPG prices. This has effects on the forest’.

 
The effect of the price increase means if you are going to cook something that will take time … use charcoal or firewood, Nii Abbey advised.

 
‘Again, some vehicles use LPG and they have no choice of parking their cars. So in all, the individual household expenditure on LPG goes up, and even worse when they have to spend some more on getting charcoal and firewood…. What about those who use gas to cook food for sale’, he asked.

 
For those cooked sellers and bakers, they need to be separated from individual household consumers. Let’s call them businesswomen for it is easy for them to transfer the price increase to consumers.

 
So there should be a system to discriminate between consumers who buy the LPG for domestic use (cooking especially) and those who use it in their cars, Nii Abbey explained.

 
He was quick to add that there should be a way of making drivers pay more and other users pay less, saying the government should think of making that possible.

UK-based Ghanaian economist and a consultant, Dr Kwame Adjei emphasized: ‘Rational consumers look for alternatives and that is exactly what they are doing. Am sure the government is also right because they have to balance the books. If the shift to charcoal is short term, then our forest reserves if any would not be affected in the long term’.

 
LOSING FOREST TO CHARCOAL
 
As it is now the charcoal sellers are cashing in on the LPG price hike which is detrimental to our forest and the environment as whole. Not only depleting the forest … but the climatic concerns … emission of carbon dioxide to the environment, the economist indicated.

Environmental campaigners and economists warn that if care is not taken the over three million rural Ghanaians who depend on the forest to survive will lose their livelihood.

Apart from the provision of food, fuel, clothing, shelter, furniture, natural medicine, potable water supply sources and bushmeat for the rural dwellers, Ghana’s forest sector has for several decades, been a major foreign exchange earner for the West African country, contributing between 4 and 6 per cent of gross domestic product (GDP).

It also accounted for 11 per cent of export earnings between 2000 and 2006, as well generating employment for the people.

However, this contribution comes from mainly the formal sector, consisting of regulated industries in timber and timber products.

The informal sector, characterised by small and medium forest enterprises (SMEFEs) broadly covering forest products, non-wood-forest products and forest services, is largely neglected, even though their contribution to livelihoods and resource sustainability outweighs that of the formal sub-sector.

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