FACTBOX: Governments worldwide shield households from rising energy costs

Governments around the world are rolling out policy measures to shield consumers and industries from rising energy costs triggered by disruptions linked to the conflict involving Iran and tensions affecting the Strait of Hormuz. Responses vary widely, ranging from fuel subsidies and tax cuts to export controls, rationing, and emergency financing.

Below is a summary of key measures announced across different countries:

Global Energy Policy Responses

Argentina

Argentina partially increased fuel taxes while postponing further hikes until June, according to a government decree.

Australia

Australia released petrol and diesel from domestic reserves to ease supply pressures affecting rural logistics, mining, and agriculture. The prime minister also encouraged greater use of public transport.

Austria

Austria introduced a “petrol price brake” to limit inflation impacts from rising oil prices and signaled plans to further scale it back.

Bangladesh

Bangladesh sought external financing to secure fuel and LNG imports and raised retail fuel prices for the second time in six weeks, increasing inflation pressure in its import-dependent economy.

Brazil

Brazil announced diesel and LPG subsidies, tax reductions on aviation fuel and biodiesel, and plans to expand biodiesel blending tests. Officials said support measures would remain in place as long as global volatility persists.

China

China strengthened energy security policies, tightened fertilizer export restrictions, and issued export quotas for urea to stabilize global supply chains affected by disruptions.

Egypt

Egypt secured a $1.5 billion financing deal for food and energy security, reduced fuel allocations for government vehicles, and slowed fuel-intensive state projects to manage consumption.

Ethiopia

Ethiopia increased fuel subsidies to cushion domestic consumers from higher global energy prices.

European Union

The European Union expanded fiscal flexibility for energy subsidies, considered strategic fuel stockpiling reforms, and coordinated gas storage and electricity tax reductions.

Greece

Greece approved fuel and fertilizer subsidies, ferry discounts, and additional household and farmer support worth hundreds of millions of euros.

India

India restricted certain gas and LPG usage patterns, urged fuel conservation, and increased export taxes on diesel and aviation fuel to prioritize domestic supply.

Indonesia

Indonesia introduced fuel restrictions, expanded work-from-home policies, increased biodiesel blending targets to B50, and raised some fuel prices while monitoring inflation risks.

Italy

Italy extended fuel tax cuts, with a stronger focus on diesel, while ramping up jet fuel production to reduce aviation supply risks.

Japan

Japan expanded coal-fired generation flexibility, released oil reserves, increased fuel subsidies, and adjusted import strategies to reduce reliance on Middle East supply chains.

Kenya

Kenya reduced diesel prices following public protests over rising living costs and fuel inflation.

Malaysia

Malaysia secured short-term energy supplies, increased fuel subsidy allocations, and ordered budget cuts across government agencies while adjusting fertiliser supply strategies.

Mauritius

Mauritius introduced energy-saving measures, including restrictions on non-essential electricity use such as decorative lighting and fountains.

Namibia

Namibia temporarily reduced fuel levies by 50% for three months to ease domestic price pressures.

Netherlands

The Netherlands introduced temporary tax relief measures and prepared contingency plans for worsening energy conditions.

Nigeria

Nigeria’s Dangote refinery increased exports of gasoline and fertilizer products to regional markets facing supply disruptions.

Pakistan

Pakistan moved to expand domestic oil storage capacity to strengthen energy security and reduce import vulnerability.

Philippines

The Philippines suspended wholesale electricity spot market operations in response to volatility, activated emergency fuel funding, and explored alternative crude supply arrangements while managing energy tariffs.

Poland

Poland extended fuel price controls and proposed windfall taxes on energy firms benefiting from elevated global prices.

Romania

Romania reduced diesel excise taxes to lower transport and logistics costs.

Serbia

Serbia sharply cut crude oil excise duties and extended restrictions on fuel exports to secure domestic supply.

Singapore

Singapore launched a support package worth nearly S$1 billion, including cash payouts and fuel vouchers to offset economic pressures.

Slovenia

Slovenia imposed temporary limits on fuel purchases to address shortages and prevent panic buying.

South Korea

South Korea increased coal and nuclear power utilization while restricting naphtha exports to stabilize domestic energy supply.

Spain

Spain proposed a €5 billion package to reduce the impact of higher energy costs on households and businesses.

Sri Lanka

Sri Lanka raised interest rates, explored alternative crude imports, introduced fuel rationing, and secured international financial assistance to manage energy-driven inflation.

Sweden

Sweden reduced public transport costs, lowered fuel taxes, and provided airline support while warning of potential jet fuel shortages.

Thailand

Thailand tightened palm oil export controls, stabilized domestic fuel prices, and introduced support measures for farmers and consumers.

United Kingdom

The United Kingdom proposed reforms to reduce reliance on volatile gas-linked electricity pricing and stabilize consumer energy bills.

United States

In Hawaii, officials considered a temporary suspension of gasoline taxes as fuel prices continued to rise.

Vietnam

Vietnam increased refined fuel imports, accelerated ethanol blending adoption, and adjusted refinery operations to manage crude supply constraints.

Summary

Across regions, governments are responding with a mix of subsidies, tax relief, price controls, energy diversification, and consumption restrictions. The policy approaches reflect differing fiscal capacities but a shared priority: limiting the economic and social impact of sustained global energy price volatility. -Reporting by Katha Kalia, Ashitha Shivaprasad, and Anjana Anil in Bengaluru; Editing by Joe Bavier, Jan Harvey and Andrew Heavens/Reuters