Burden of the global energy price crisis on households

Abstract

The Russia–Ukraine conflict has triggered an energy crisis that directly affected household energy costs for heating, cooling and mobility and indirectly pushed up the costs of other goods and services throughout global supply chains. Here we bridge a global multi-regional input–output database with detailed household-expenditure data to model the direct and indirect impacts of increased energy prices on 201 expenditure groups in 116 countries. On the basis of a set of energy price scenarios, we show that total energy costs of households would increase by 62.6–112.9%, contributing to a 2.7–4.8% increase in household expenditures. The energy cost burdens across household groups vary due to differences in supply chain structure, consumption patterns and energy needs. Under the cost-of-living pressures, an additional 78 million–141 million people will potentially be pushed into extreme poverty. Targeted energy assistance can help vulnerable households during this crisis. We emphasize support for increased costs of necessities, especially for food. The Russia–Ukraine war triggered an energy crisis that affected the cost of many goods and services. Guan et al. model the direct and indirect impacts of increased energy prices across expenditure groups and countries, finding temporary increases in total household energy costs of 63–113% under different scenarios.