The Impact of Energy Price Changes in Moldova

In January 2006 the price of natural gas supplied to Moldova increased from $80 to $110 per thousand cubic meters (mcm). Prices may increase further in the near future, putting additional pressure on the economy and leading to adverse effects on the poorest households. This study examines the potential impact of higher energy prices on the economy of Moldova by simulating the likely macroeconomic consequences of recent and future price increases. Moreover, it estimates the direct impact on individual households using data drawn from the 2004 Household Budget Survey. It assesses the distributional implications of the price shock, noting how the social impact may vary depending on the intensity of energy use, geographic location, and the relative share of energy in household expenditure. The results suggest that energy price changes could dampen economic growth while putting additional strains on the current account deficit. The impact on the poorest households could be significant and protecting them may require resources in the amount of 0.7 to 1.7 percent of GDP. This study identifies possible policy responses to dampen the shock of the energy price increase and to promote the longer-term objective of reducing energy vulnerability.

Bibliographic Details

Main Authors:	Baclajanschi, Iaroslav, Bouton, Lawrence, Mori, Hideki, Ostojic, Dejan, Pushak, Taras, Tiongson, Erwin R.
Format:	Policy Research Working Paper biblioteca
Language:	English
Published:	World Bank, Washington, DC 2006-07
Subjects:	ADVERSE EFFECTS, AIR QUALITY, ALTERNATIVE ENERGY, ALTERNATIVE ENERGY RESOURCES, AVERAGE PRICE, COAL, COAL USE, COMMERCIALIZATION, CONNECTED HOUSEHOLDS, CONSUMER OF ENERGY, CONSUMPTION OF ENERGY, COST OF ENERGY, COST OF GAS, DEFORESTATION, DEMAND FOR ENERGY, DIRTY FUEL, DISTRIBUTION LOSSES, DISTRICT HEATING, EAST EUROPE, ELECTRICITY, ELECTRICITY CONSUMPTION, ELECTRICITY DISTRIBUTION, ELECTRICITY GENERATION, ELECTRICITY PRICE, ELECTRICITY PRICES, ELECTRICITY SECTOR, ELECTRICITY TARIFFS, ENERGY BALANCE, ENERGY CONSUMERS, ENERGY CONSUMPTION, ENERGY CONVERSION, ENERGY COSTS, ENERGY DEMAND, ENERGY EXPENDITURE, ENERGY EXPENDITURES, ENERGY MARKET, ENERGY PRICE, ENERGY PRODUCERS, ENERGY PRODUCTS, ENERGY RESOURCES, ENERGY SOURCE, ENERGY SUPPLY, ENERGY USE, ENVIRONMENTAL COSTS, FUEL, FUELS, GAS CONSUMPTION, GAS CYLINDERS, GAS IMPORTS, GAS INDUSTRY, GAS SUPPLIES, GAS SUPPLY, HEAT, HIGH ENERGY INTENSITY, HIGHER ENERGY PRICES, IMPROVING ENERGY EFFICIENCY, INCOME, INFLATION, INTERNATIONAL ENERGY AGENCY, INVESTMENTS IN ENERGY, INVESTMENTS IN ENERGY INFRASTRUCTURE, MAINTENANCE ACTIVITIES, MARGINAL COST OF ELECTRICITY, MARKET ECONOMY, MARKET FORCES, MONOPOLY, NATURAL GAS, NATURAL GAS PRICE, NATURAL GAS PRICES, OIL, OIL EQUIVALENT, OIL PRODUCTS, PETROLEUM, PETROLEUM GAS, PETROLEUM PRICE, PETROLEUM PRICES, PETROLEUM PRODUCTS, POWER, POWER GENERATION, POWER GENERATION SYSTEM, POWER GRID, POWER PLANT, POWER PLANTS, PRICE CHANGE, PRICE CHANGES, PRICE ELASTICITY, PRICE ELASTICITY OF DEMAND, PRICE INCREASE, PRICE INCREASES, PRICE OF ELECTRICITY, PRICE OF ENERGY IMPORTS, PRICE STABILITY, PRICES, PRIMARY ENERGY, PRIMARY ENERGY SUPPLY, SPREAD, SUBSTITUTE, SUBSTITUTION, SUPPLIER, SUPPLIERS, SUPPLY COSTS, TOWNS, TRANSMISSION CAPACITY, UTILITY BILL, VOLTAGE, WASTE,
Online Access:	http://documents.worldbank.org/curated/en/2006/07/6913752/impact-energy-price-changes-moldova http://hdl.handle.net/10986/8385
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