This paper focuses on the economic analysis of energy consumed for cooking in urban households in Nepal. In this paper, annual energy requirements, energy efficiency, various combinations of fuels, stoves and utensils used for cooking and their corresponding costs have been examined through lab experiments and surveys. The estimate of system efficiencies for household cooking is one of the major contributions of this paper. The paper also discusses costs of energy use and compares various energy alternatives for cooking. It is believed that the analysis presented here will be helpful to the policy planners to devise better energy options for households. (C) 2003 Elsevier Ltd. All rights reserved.