Factors influencing natural gas utilization: case study of Tanzania, Mozambique and Egypt

In Africa, the natural gas utilization has recently developed substantially and mainly stimulated by improved economic activities, large investments in advanced infrastructures and natural gas domestic price subsidies. In 2017, the government of Tanzania launched a programed to facilitate use of LPG gas as main fuel for cooking instead of fuel wood/charcoal to reduce deforestation. However, households and industrial demand for natural gas is still minimal. The study uses a panel data set of natural gas production and consumption for the period 2007 — 2017, to analyses factors influencing natural gas utilization in the country. The design of the study is panel approach that is composed of three countries that include Tanzania, Mozambique and Egypt. Descriptive statistics, unit root test using Augmented Dickey-Fuller test has been performed to check for stationary. The study employed Arellano Bond dynamic panel estimation technique to estimate factors that influence natural gas consumption. Findings revealed that natural gas production, previous year gas consumption, electricity production from natural gas and GDP per capita have positive significant impact to natural gas consumption. The study recommends the governments of Tanzania, Mozambique and Egypt to increase their natural gas production which will result into more consumption of natural gas. The study further recommends the electricity production in these countries should increase their share from natural gas; hence there will be more consumption of the natural gas.