Tag: bills

Soaring energy prices triggered by the Russia-Ukraine conflict could push up to 141 million more people around the globe into extreme poverty, a study has found.

The cost of energy for households globally could have increased by between 62.6% and 112.9% since Russia’s invasion of Ukraine, according to a modelling study by an international group of scientists published in Nature Energy.

The study modelled the impact of higher energy prices on the spending of 201 groups, representing different expenditure levels, in 116 countries, covering 87.4% of the global population.

Despite efforts by governments to insulate consumers from the price rises, researchers estimated that overall household expenditure rose by between 2.7% and 4.8%.

As a result, they estimate that an additional 78–141 million people worldwide could be pushed into extreme poverty.

One of the report’s authors, Yuli Shan, a professor at the University of Birmingham, said: “High energy prices hit household finances in two ways: fuel price rises directly increase household energy bills, while energy inputs needed to produce goods and services push prices up for those products as well, and especially for food, which affects households indirectly.

“Unaffordable costs of energy and other necessities will push vulnerable populations into energy poverty and even extreme poverty.”

Shan added: “This unprecedented global energy crisis reminds us that an energy system highly reliant on fossil fuels perpetuates energy security risks, as well as accelerating climate change.”

Household gas and electricity bills rose sharply last year, while petrol and diesel prices hit record highs.

A report prepared for the World Economic Forum in Davos last month said soaring prices for energy and food could persist for the next two years.

The energy crisis has led to calls for nations to move faster in building renewable energy sources, while governments have turned to polluting fuels such as coal to ensure security of power supplies.

Another of the report’s authors, Klaus Hubacek of the University of Groningen, said: “This crisis is worsening energy poverty and extreme poverty worldwide. For poor countries, living costs undermine their hard-won gains in energy access and poverty alleviation.

“Ensuring access to affordable energy and other necessities is a priority for those countries, but short-term policies addressing the cost of living crisis must align with climate mitigation goals and other long-term sustainable development commitments.”

The UK and Europe have been urged to follow the US’s lead in encouraging green investment through Joe Biden’s Inflation Reduction Act.

Western nations have attempted to put a dent in the Kremlin’s coffers by placing a price cap on Russian oil while still allowing it to flow to avoid spiralling fuel prices.

In recent weeks, wholesale gas prices have fallen as the mild winter and strong gas storage levels in Europe have boosted confidence that countries will not experience energy shortages this winter. However, concerns remain over how nations will replace Russian gas supplies next winter.

In the UK, energy bills are to rise by 40% in April when government support for bills becomes less generous. National Energy Action estimates there are now 6.7 million UK households in fuel poverty – a figure that has more than doubled since 2020.

Last week Greenpeace threatened to take legal action against the UK government as it emerged that a target to lift millions of struggling households out of fuel poverty was likely to be missed.