Most people in urban areas must pay for the energy they consume. Even the poorest households usually pay for traditional cooking fuels, such as fuelwood or charcoal. Policies that lead to higher energy prices are therefore regressive and can cause significant hardship for poor urban households. The poor often pay higher prices for energy than more wealthy households. This is partly the result of both the heat content of the fuels used and the conversion efficiencies of the technologies used to produce what is called useful energy.
Appliances fueled by wood, charcoal, and kerosene are often very inefficient.
Conversely, appliances designed for LPG or electricity, purchased mainly by wealthier households, use energy more efficiently. The reasons the poor often do not take advantage of the lower prices for useful energy offered by LPG involve limited access to LPG, user-access fees, and the significant costs of LPG stoves and bottles. Lighting The price of lighting is higher for the poor than for higher-income households that use electricity rather than inefficient kerosene lamps. Even on conservative assumptions, the energy efficiency of an electric incandescent bulb is 10 to 15 times more efficient than a kerosene lamp, and a fluorescent tube is 35 to 40 times more efficient. Limited access to electricity is thus the key reason the poor pay higher prices for lighting.