The conflict in the Middle East has triggered a major shock to global energy markets, with the effective closure of the Strait of Hormuz triggering the largest supply disruption in the history of oil markets and significantly impacting supplies of natural gas and a range of energy-related commodities.

As concerns over supply security have grown, prices have risen across several parts of the energy system, increasing pressure on household budgets, public finances and economic activity more broadly. In response, many governments have announced emergency measures to protect consumers from higher energy costs.

The IEA has supported these efforts by launching its largest-ever release of emergency oil stocks, publishing a menu of demand-side measures that governments, businesses and households can take to shelter consumers from price pressures, and tracking the actions being taken through its new Energy Crisis Policy Response Tracker.

So far, governments have supported consumers in two ways: through direct price relief, such as fuel price caps or tax cuts, and through demand-side measures aimed at reducing energy use. Designing these measures well is critical, and international experience offers useful lessons.

While easy to deploy, untargeted energy bill support primarily benefits higher-income households and puts pressure on public finances

When prices rise sharply, governments often first turn to broad-based price support measures that can provide immediate relief to consumers. This is already happening, with several countries in Asia and Europe temporarily capping fuel prices or reducing energy taxes.

However, while untargeted support measures can be implemented relatively quickly, they present two major challenges. First, universally lowering the price of fuel when supply is tight sends the wrong market signal, weakening incentives to reduce energy use and improve efficiency in the context of the current supply-demand gap. Second, much of the financial support does not reach those who need it most: low-income households struggling to pay their energy bills.

Because higher-income households tend to spend more on energy in absolute terms, broad-based price reductions often deliver greater financial gains to higher-income groups. For example, a recent study in the Netherlands estimates that around 70% of the total value of a broadly applied reduction in fuel excise duty ends up benefiting middle-high and higher-income groups.

This is particularly important because lower-income households are also the most exposed to energy price shocks. At the height of the 2022 energy crisis, low-income households in advanced economies spent around one-quarter of their income on energy – up 4 percentage points from 2021. By contrast, median-income households spent around 10% of their income on energy, with an increase of less than 2 percentage points.

Untargeted support also comes at a high fiscal cost. Governments spent around USD 940 billion in direct grants, vouchers and tax reductions in response to the 2022 energy crisis, yet only 25% of this support was targeted. With public finances still under strain following the Covid-19 pandemic and the 2022 energy crisis, many governments now have less fiscal space to sustain broad-based measures. This constraint has already been acknowledged in several European countries. In response to the current crisis, the OECD has recently warned against relying on broad-based support measures over the longer term.

Targeted support measures are a tried-and-tested policy solution

A more effective approach is to introduce support measures that directly target those most vulnerable to price shocks. This ensures that public money is used more efficiently and reaches the households most affected by the crisis. A key issue is that governments may find it difficult to quickly and efficiently identify those most in need of support.

Fortunately, governments do not always need to start from scratch, and there are ways to improve targeting quickly. Many countries already have policy instruments in place to support low-income households and other vulnerable groups, such as social assistance programmes, unemployment benefits, pension schemes and income-based grants. A quick way to deliver direct support is to ramp up programmes that already target these groups, or to use existing databases to identify households likely to be under financial strain.

Governments can also work with municipalities or community organisations that hold relevant information. Targeting can then be refined further by combining this with other household characteristics, such as home energy efficiency or energy consumption data. For countries that might not yet have public administration infrastructure in place to effectively target those in need, strengthening these programmes is an important first step.

Countries have successfully done this before. In 2022 and 2023, the Netherlands introduced an energy allowance for low-income households, providing direct cash transfer of around EUR 1 300 per year. Municipalities were tasked with identifying and paying eligible households, pulling from existing data and infrastructure to ensure support reached those most in need.

Since 2018, France has provided direct cash vouchers to low-income households to help cover energy bills, using its national tax registry to identify beneficiaries. In Indonesia in 2022, the government shifted from initial broad-based fuel subsidies to targeted transfers to lower-income groups as pressure on state budgets increased.

A key prerequisite is having the systems in place to target and deliver support to vulnerable households effectively. In Nigeria, for example, financial assistance was provided to 12 million low-income households in 2023 through direct digital transfers to beneficiaries’ bank accounts and mobile wallets. Similarly in Brazil, a national registry covering more than 40% of the population has been used to automatically enrol low-income households in several social programmes, including a social tariff scheme which now provides fully subsidised electricity for up to 80 kWh.

In response to the current crisis, several countries have announced targeted measures aimed at supporting those most in need while limiting fiscal. The United Kingdom, for example, has allocated GBP 53 million to support vulnerable heating oil customers, among the hardest hit by rising oil prices. Local councils can determine eligibility and how the support is distributed. In a similar fashion, Pakistan has introduced a relief package targeted at transport operators, such as motorcycle and rickshaw owners who rely on fuel for their daily income, using its existing Benazir Income Support Programme to identify potential recipients and disburse payments directly through digital wallets. Despite these positive examples, however, so far just 25% of government price support measures announced globally in response to the current crisis have been targeted.

There is no exact way of identifying precisely who needs support and who does not. Although some support may still go to households that need it less, leakage is significantly lower than under untargeted schemes. And while some eligible households may still be missed, this can be reduced by allowing households to apply and be reassessed.

On the demand side, well-designed campaigns can help consumers reduce their exposure to high energy prices

In response to the current crisis in the Middle East, many governments have also launched campaigns encouraging consumers to save fuel. For example, Australia announced its “Every Little Bit Helps” campaign, while Singapore’s campaign calls on households and businesses to “Save Energy Together“. But not all campaigns are created equal – effective campaigns need to be carefully designed to ensure they reach the right audiences with messages they can act on.

Evidence shows that tailoring to specific groups, rather than using a one‑size‑fits‑all approach, tends to deliver stronger and more durable results. During the 2022 energy crisis, information campaigns evolved from broad energy efficiency advice to more focused, action-oriented guidance linked to concrete behavioural changes and available supports. Drawing on international experience, several practical lessons emerge for policymakers seeking to protect vulnerable consumers and maximise impact.

• Build on existing systems and programmes: Governments that responded most quickly and effectively during the 2022 crisis built their information campaigns on established programmes, partnerships and delivery frameworks. These existing structures provide trusted delivery channels that can be adapted rapidly in emergency situations, making them especially valuable during an energy crisis.
• Work with trusted intermediaries. Community organisations, local authorities and energy retailers can significantly expand the reach and credibility of national campaigns. They can translate national messaging into locally relevant actions and help connect households to financial and technical support. In the Netherlands, for example, a programme supporting municipalities to deploy household energy coaches and fixers reduced both energy costs and medical expenses, with the greatest impact observed among households experiencing energy poverty.
• Understand and segment the audience. Effective targeting requires a clear understanding of households’ needs and circumstances. Audience segmentation helps shape the narrative, identify the appropriate communication channels and tailor messages accordingly. During the 2022 crisis, Ireland adapted its campaign from “Reduce your use” to “Stay warm and well” in response to consumer feedback, with a stronger emphasis on vulnerable households. The campaign was associated with a 12% reduction in residential electricity use.
• Define clear messaging that connects well with the audience. Campaign messages should be simple, relevant and closely aligned with the desired behaviour. Some of the most successful campaigns also encourage people to participate and share their experience. In 2022, for example, India introduced electric buses in Delhi, made them free for three days and launched a campaign encouraging people to take selfies on board and share them online. In the first few days, over 100 000 people used the new buses.  
• Highlight both existing and new support measures. Information campaigns are most effective when they promote both immediate consumer support and longer-term measures such as grants, subsidies and retrofit programmes. Combining behavioural guidance with clear information on available support can help households take action and invest in lasting improvements. For example, Denmark paired its energy awareness campaign with information on grants and longer term support, helping to strengthen uptake.

To build long-term resilience, governments should focus on energy bills, not just prices

Targeted, short-term support can help shield consumers from acute price shocks. But to make consumers more resilient to future price swings and bring down energy bills permanently, governments need to invest in targeted energy efficiency policies.

First, governments can promote affordable access to more efficient vehicles and ensure adequate public transport. Increasing the uptake of second-hand EVs, hybrids and other efficient vehicles – including not only cars but also two-wheelers, buses and trucks – alongside charging infrastructure can help reduce households’ exposure to oil price volatility. Some policies already target lower-income households, such as Germany’s income-based EV scheme, Slovenia’s second-hand EV grant and India’s electric two- and three-wheeler subsidy.

Second, where possible, governments can accelerate the deployment of modern cooking solutions and expand electricity access to improve efficiency, affordability and fuel diversity. In Indonesia, for example, the government is advancing this shift by supporting the adoption of modern cooking equipment and the diversification of their cooking fuel mix – including greater use of electricity – through pilot projects and appliance distribution to households.

Third, governments can improve the efficiency of homes and accelerate the uptake of heat pumps, which are the most energy efficient form of home heating. In Canada, the Oil to Heat Pump Affordability Program provides upfront grants to low- and median-income households to help them make this switch. Governments can also strengthen or introduce minimum energy performance standards for household appliances such as air conditioners or refrigerators. These are among the longest-standing energy efficiency policy instruments and often the most cost-effective ways to improve product efficiency and lower household energy costs.

The IEA has long described energy efficiency as the world’s “first fuel”. The current crisis underlines that it is also often the most effective way to strengthen long-term consumer resilience, especially for vulnerable households.

By Lucas Boehlé (Energy Analyst), Emma Mooney (Energy Analyst) and Jérôme Bilodeau (Senior Programme Manager – Energy Efficiency)