Household energy affordability

Household energy affordability continues to be a key priority for governments as energy bills remain elevated Household energy bills globally have come down from the peaks seen during the global energy crisis in 2022, but on average they were still around 4% higher in real terms in 2024 than they were in 2019. Household energy bills soared in many parts of the world as a result of the Covid-19 pandemic and
Russia’s full-scale invasion of Ukraine in 2022, which introduced a period of extreme volatility and a sharp run-up in prices. At the peak of the crisis in 2022, bills rose 16% year-on-year. This fuelled inflationary pressures and pushed energy affordability to the top of the political agenda. For most households around the world, energy is the third-largest expense after food and housing.
Household bills are sensitive to movements in underlying fuel prices; oil price pressures eased in 2025, but natural gas markets remained relatively tight in many parts of the world. Benchmark oil prices were around USD 15/barrel lower at the end of the year than at the start, reflecting a large global supply surplus and bringing gasoline prices back to pre-crisis levels. Meanwhile, relatively slow growth in supply kept natural gas import prices elevated in the first six months of 2025, before coming down as new LNG export projects began operating; residential natural gas prices in Europe and Japan were on a downward trend in 2025, but they remain around 10-30% above pre-crisis levels in real terms. North America, by contrast, saw residential natural gas prices rise by around 5% in 2025, though they remain well below prices in Europe and other importing regions.
The prices paid by households for energy vary widely from country to country, reflecting not just the cost of supply but also various additional levies, taxes and subsidies. For gasoline, taxes can account for as much as 70% of the final price charged to consumers, as is the case in some countries in Europe. It can also be subsidised and delivered at prices below market value, as in many parts of the Middle East. Electricity is generally subject to less tax compared to oil, but the range is equally wide, with different types of taxes, fees, levies and surcharges amounting to as much as 50% of electricity bills in some
countries, or as low as zero in others. On average, the electricity system cost, i.e. the actual cost of producing and transporting the energy to consumers, makes up around 75% of the cost of electricity for households.

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