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 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.

Bibliographic Details

Main Author:	Ersado, Lire
Language:	English en_US
Published:	World Bank, Washington, DC 2012-07
Subjects:	ADVERSE IMPACT, AGGREGATE ENERGY CONSUMPTION, ALTERNATIVE ENERGY, APPROACH, CONSTRUCTION, CONSUMER OF ENERGY, CONSUMPTION OF ENERGY, COST OF GAS, DISTRIBUTION LOSSES, DOMESTIC ENERGY, DOMESTIC ENERGY PRODUCTION, ELECTRICITY, ELECTRICITY CONSUMPTION, ELECTRICITY PRODUCTION, ELECTRICITY SECTOR, ENERGY BALANCE, ENERGY CONSUMPTION, ENERGY CONVERSION, ENERGY COSTS, ENERGY DEMAND, ENERGY ECONOMICS, ENERGY EFFICIENCY, ENERGY EFFICIENCY INVESTMENTS, ENERGY EXPENDITURES, ENERGY NEEDS, ENERGY PRICE, ENERGY PRICES, ENERGY PRODUCTION, ENERGY PRODUCTS, ENERGY SOURCES, ENERGY STRATEGY, ENERGY USE, FUEL, FUEL SWITCHING, GAS, GAS CONSUMPTION, GAS PRICE, GAS PRICES, GAS SUPPLY, GASIFICATION, HEAT, HEAT SUPPLY, HEATING ENERGY, HEAVY RELIANCE, HIGHER ENERGY PRICES, HIGHER GAS, HYDROPOWER, INCOME, INDUSTRIAL SECTOR, INTERNATIONAL ENERGY AGENCY, IRRIGATION WATER, IRRIGATION WATER SUPPLY, NATURAL GAS, NATURAL GAS IMPORTS, NUCLEAR PLANT, OIL, OIL EQUIVALENT, PETROLEUM, PETROLEUM GAS, PETROLEUM PRODUCTS, POWER SECTOR, PRICE ELASTICITY, PRICE ELASTICITY OF DEMAND, PRICE OF GAS, PRIMARY ENERGY, PRIMARY ENERGY SUPPLY, QUANTITY OF GAS, RESIDENTIAL CONSUMERS, RESIDENTIAL DEMAND, RESIDENTIAL ENERGY, SOURCE OF ENERGY, SPACE HEATING, TOWNS, URBAN AREAS, WELFARE LOSSES,
Online Access:	http://documents.worldbank.org/curated/en/2012/07/16554449/poverty-distributional-impact-gas-price-hike-armenia https://hdl.handle.net/10986/11988
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