How Can We Understand the Impact of Energy Subsidies and their Reform on Households?

Photo: © Ray Witlin / World Bank

People’s ability to afford electricity to light their homes or power their domestic appliances, pay for gas to cook, or heat their homes, or buy fuel to run their businesses has been a concern for many poor and vulnerable households. In recent years, even middle-income households in developing and developed countries alike started feeling such pressures. It’s no surprise, then, that various media outlets have been reporting extensively on how energy affordability concerns affect daily lives of households and small business owners, such as this New York Times story about those in Ecuador, Nigeria and the Philippines (similar stories are here, here, here, here, here and here).

All of this makes one thing clear: it is critical to understand whom existing energy subsidies benefit, and how different households stand to be affected by different options for reforming them.

Read the full Blog | Learn more about ESMAP's Energy Subsidy Reform Facility