Poverty and Distributional Impact of Gas Price Hike in Armenia
Armenia 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 e...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/07/16554449/poverty-distributional-impact-gas-price-hike-armenia http://hdl.handle.net/10986/11988 |
| Summary: | Armenia 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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