Poverty and distributional impact of gas price hike in Armenia
AbstractArmenia meets about 75 percent of its energy needs through imports, with natural gas imports from Russia accounting for about 80 percent of total energy imports and 60 percent of total primary energy supply. Because of high dependence on imported energy, Armenia is vulnerable to external energy price shocks, which are often beyond the control of its policymakers. A most recent case in point was the 2010 Russian gas tariff increase, which led to a nearly 40 percent increase in the retail gas price for residential consumers. Coming on the heels of the global economic recession that hit Armenia's economy hard, the price hike amplified the impact on households that rely primarily on gas for heating and cooking. Using aggregate energy consumption data and a nationally representative household survey immediately before the crisis, this paper provides an overview of household energy consumption patterns, highlights Armenia's energy vulnerability, and estimates the direct poverty and distributional impacts of the increase in the cost of imported gas. The analysis shows that the gas price hike resulted in a significant increase in energy expenditures, with disproportionately higher impact on the poor and vulnerable households. The paper concludes with a discussion on the effectiveness of the mitigation measures employed by the Government of Armenia.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 6150.
Date of creation: 01 Jul 2012
Date of revision:
Energy Production and Transportation; Energy and Environment; Environment and Energy Efficiency; Transport and Environment; Water and Industry;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-08-23 (All new papers)
- NEP-CIS-2012-08-23 (Confederation of Independent States)
- NEP-ENE-2012-08-23 (Energy Economics)
- NEP-ENV-2012-08-23 (Environmental Economics)
- NEP-TRA-2012-08-23 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Heltberg, Rasmus, 2004. "Fuel switching: evidence from eight developing countries," Energy Economics, Elsevier, vol. 26(5), pages 869-887, September.
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