By KT Reporter
The International Energy Agency (IEA) has warned that government responses to the global energy shock risk missing the people most in need, even as fuel prices surge following disruptions in the Middle East.
The agency says broad fuel subsidies and tax cuts, widely used to cushion consumers, often benefit higher-income households more than vulnerable groups while placing heavy strain on public finances.
The warning comes as the conflict in the Middle East disrupts oil and gas flows, with the closure of the Strait of Hormuz triggering a major supply shock and driving up global energy prices.
According to the IEA, lower-income households are bearing the brunt of the crisis, spending a larger share of their income on energy and facing greater exposure to price increases.
The agency is urging governments to shift from blanket subsidies to targeted support, including direct cash transfers and existing social protection systems, to ensure relief reaches those most affected.
It notes that many countries already have systems in place that can be scaled up quickly, including welfare programmes and digital payment platforms.
At the same time, the IEA is calling for stronger demand-side measures, including public campaigns to reduce energy consumption, warning that poorly designed messaging may fail to change behaviour.
Beyond immediate relief, the agency says the crisis highlights the need to focus on reducing energy bills, not just prices, through long-term investments in efficiency.
These include expanding access to efficient transport, improving housing insulation and promoting energy-saving technologies.
The IEA says the current crisis exposes structural weaknesses in how countries respond to energy shocks, with better targeting and efficiency seen as key to protecting consumers and limiting economic damage.
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