Impact of Electricity Pricing on the Residential Sector Market in Pointe-Noire, Congo-Brazzaville

Abstract

Electricity is considered a public service and, for mainly historical reasons, its price is most often set based on the cost of production. The aim of this article is to analyze the impact of electricity pricing on the residential sector market in Pointe-Noire, Congo, based on household electricity consumption survey data ( LEFI, 2022 ). The Stone-Geary expenditure model (1954) is used and applied to a single good, electricity, in order to draw reasonable conclusions. The results indicate that the price of electricity, the price of coal, the price of oil, and expenditures on generators are significant and have positive effects on the residential sector market. Furthermore, the estimation of price elasticities is negative and significant, which clearly indicates that an increase in the price of electricity leads to a decrease in household consumption. This relationship shows that households are sensitive to the price of electricity, at least to some extent. Indeed. Taking these factors into account could argue in favor of eliminating the regressive nature of the current pricing in Congo, particularly by removing the audiovisual fee. By doing so, the poorest households would stop subsidizing the electricity consumption of wealthier households.