It’s not just about income. So who gets energy price relief?

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Policymakers are looking beyond household income and firm size as criteria to better target energy support measures. Mobility needs, energy vulnerability, and sector-based exposure are factors that can help direct support to those most in need.

by Cassie Castle and Eugenia Brotons Batista, OECD Economics Department

Disruptions to energy supplies passing through the Strait of Hormuz have pushed up global energy prices for the past several months, placing sustained pressure on households and firms. Yet the impact is unequally distributed. Households and firms differ considerably in their exposure to higher energy costs and their ability to absorb them (Blake & Bulman, 2022).

Policymakers aim to provide financial support in a timely manner and often the quickest way to deliver relief is through broad-based measures. Broad-based measures apply to a wide share of the population; they can be implemented swiftly through existing systems and bypass the administrative burden of identifying eligibility. For example, VAT reductions on transport fuels have been a popular broad-based measure during the current energy crisis.

However, broad-based measures have some drawbacks. First, they provide support irrespective of need or exposure to shocks which can make them more fiscally costly than targeted measures. Second, while measures that reduce the cost per unit of energy can shield consumers from higher prices, they can also weaken incentives to cut consumption. And in a supply shock, maintaining price signals is desirable to help moderate demand and improve market efficiency.

OECD analyses have emphasised that government intervention to support households and firms, should be targeted towards vulnerable households and otherwise viable firms that are particularly exposed to the shock (OECD, 2026; Hemmerlé & et al., 2023). Doing so can help contain spending at a time when fiscal space is increasingly constrained. This blog provides examples of how policymakers can target support to the most burdened groups while preserving incentives to reduce energy consumption.

The OECD Energy Support Measures Tracker 2026 records policies introduced by governments to mitigate the impact of the current energy crisis on their economies in a publicly available online database. Of the 248 measures captured in the Tracker, about half are targeted, meaning that they are designed to support specific groups of households or firms rather than all consumers.

Identifying households exposed to high energy prices

Governments are using a range of criteria to better identify vulnerable households. These go beyond income alone and include factors like driving needs, energy source dependence and other exposure factors, such as age and family composition (Figure 1).

Mobility needs

Households may have different exposure to energy price shocks depending on their mobility needs. This is the most common targeting factor identified in the Tracker, accounting for about one third of targeted household measures. With benchmark diesel prices nearly doubling since February 2026, households that depend on private vehicles for commuting or work face higher costs, especially where public transport alternatives are limited.

Several countries have used existing administrative data and observable travel needs to identify these vulnerable households. France introduced a scheme allowing lower-income workers who meet commuting-distance or annual-mileage thresholds to apply for a one-off fuel payment, with income eligibility assessed using existing tax information. New Zealand targeted relief for teachers assigned to small, rural and isolated schools by temporarily increasing their mileage reimbursements to offset higher fuel costs. Denmark also temporarily increased commuting tax deductions for 2026, using travel distances to determine eligibility and providing additional relief to lower-income commuters.

Energy-source exposure

Households can also be more exposed to higher energy prices if they rely on more price-affected fuels for cooking and heating, such as natural gas, heating oil or LPG. Around one fourth of targeted household measures take this exposure into account. Portugal temporarily increased bottled-gas discounts to households eligible for the social electricity tariff, targeting a fuel widely used by low-income families for cooking and heating. The United Kingdom provides support to financially vulnerable households reliant on heating oil, many of whom live in rural areas without access to the gas grid and with few heating alternatives. The Netherlands takes a broader approach through its Energy Emergency Fund, using both income and energy expenditure as a share of income to identify households facing particularly high energy costs.

Not all firms are equally exposed to the energy shock

For firms, governments have focused support on sectors most exposed to higher energy costs. Targeted measures have concentrated on freight and passenger transport operators, energy-intensive industries and firms reliant on crisis-affected intermediate or indirect inputs (Figure 2). In these sectors, fuel accounts for a large share of production cost and firms often have limited scope to reduce consumption without cutting back operations. Sharp increases in energy prices can therefore threaten the viability of otherwise competitive firms (André & et al., 2023). Support for firms should be temporary and targeted at those viable firms particularly affected by the shock to avoid distorting competition and impeding the efficient reallocation of resources (Hemmerlé & et al., 2023).

While most measures targeted at firms in the Tracker rely on sector-based eligibility, some countries use additional information to target and deliver support. Peru requires eligible passenger and freight operators to demonstrate fuel purchases through electronic receipts linked to registered vehicles. Ireland sets different compensation ceilings for fishing vessels based on characteristics such as engine power and fishing gear; they also require invoices to verify gasoil purchases. Korea goes a step further and covers 50% of price increases (relative to pre-conflict levels) for naphtha and petrochemical-feedstock imports; this measure links support directly to price exposure.

Looking ahead

Looking ahead – both for fine-tuning existing support as well as introducing future measures – effective targeting requires looking beyond income and firm size to assess exposure to energy price shocks. The Tracker provides some evidence that governments are moving in the right direction, increasingly targeting measures using criteria other than income. However, in many countries there is still scope to strengthen data systems and administrative capacity. Digitalising delivery systems, collecting timely and comprehensive data on vulnerability indicators beyond income, and scaling up social protection mechanisms can help governments identify those most affected so they can deliver timely, targeted support in future shocks (OECD, 2026).

References

André, C. et al. (2023), “Rising energy prices and productivity: short-run pain, long-term gain?”, OECD Economics Department Working Papers, No. 1755, OECD Publishing, Paris, https://doi.org/10.1787/2ce493f0-en.

Blake, H., & Bulman, T. (2022), “Surging energy prices are hitting everyone, but which households are more exposed?” OECD EcoScope, https://oecdecoscope.blog/2022/05/10/surging-energy-prices-are-hitting-everyone-but-which-households-are-more-exposed/.

Hemmerlé, Y. et al. (2023), “Aiming better: Government support for households and firms during the energy crisis”, OECD Economic Policy Papers, No. 32, OECD Publishing, Paris, https://doi.org/10.1787/839e3ae1-en.

OECD (2026), “Energy prices are spiking again: New relief measures, old lessons”, OECD Publishing, Paris, https://doi.org/10.1787/a68e5c37-en.

Households off the gas-grid and prices for alternative fuels – House of Commons Library