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The government is to distribute 200,000 solar lanterns to rural dwellers, to mitigate the effects of the fuel price hike on them. The solar lanterns would replace the kerosene lamps in use. The project has already begun on a pilot basis, with 20,000 of the lanterns distributed so far, country-wide. Edward Bawa, Director of Communications at the Ministry of Energy disclosed this to The "Ghanaian Times" in Accra yesterday. He said the intervention had become necessary, because the government had realized that subsidized kerosene was continuously diverted. Mr. Bawa said as a result the product remained scarce with many households in off grid rural areas compelled to pay higher prices. The commodity was often retailed for more than GH�1.20 of a 330ml bottle (cocoa-cola bottle size) which meant about four times the ex-pump prize of GH�0.91 per litre. He said in spite of these nefarious activities the government continues to subsidize kerosene to the tune of about GH�40 million annually with the aim of the product reaching rural dwellers because it was the main source of fuel for cooking and for lamps. Mr. Bawa said the government also planned to provide solar energy to remote rural areas, especially islands and lakeside communities to help improve community lighting saying, �the vision was to reduce the need for kerosene in beneficiary communities�. He said the government was also implementing the rural electrification scheme and promised that by December, over 80 percent of the country would have access to electricity. Touching on the justification for the removal of subsidies, Mr. Bawa said because of government�s inability to promptly pay the subsidies it should prudently move away from the subsidy regime to allow the National Petroleum Authority to resume full cost recovery. He said the decision was taken when government realized that the granting of subsidies on all petroleum products could not be sustained, especially when target groups were not benefiting. Mr. Bawa said the government had paid a total of GH�1.1 billion to Petroleum Service Providers (PSPs) while about GH�400 million still remained outstanding. This year, the debt was expected to accrue to about GH�2.5 billion saying, �If the outstanding amount for 2012 was added, then a total cumulative subsidy of GH�3.4 billion was envisaged. Mr. Bawa said under the petroleum pricing formula, government was under no obligation to subsidies petroleum products as the NPA has been given the mandate to fix the ex-pump prices.