Households across Egypt experienced the sharp end of the country’s energy crisis in 2023 and 2024, as rolling electricity blackouts left millions of people sweltering in the summer heat. Increased gas imports have now eased the crisis there, but the availability and price of energy remains a key political and domestic issue in many regions.
A new analysis offers fresh insight on how the availability and price of energy can influence household finances1. Led by Fateh Belaïd, an economist at KAPSARC and Véronique Flambard, an economist at the Lille Catholic University in France, the study focuses on fuel poverty, an umbrella term for a household’s inability to obtain sufficient energy for essential services such as cooking, heating, cooling, and lighting.
“This issue is crucial because it impacts health, exacerbates social inequality, and has economic consequences,” says Belaïd. “It affects vulnerable groups disproportionately, forcing choices between basic needs like heating and food.”
To examine fuel poverty, especially how it affects developing countries, the economists focused on Egypt because reliable nationwide data is available for household income, expenditure, and consumption. In particular, they wanted to untangle the impact of housing and fuel costs, and how this determined the number of people classifiedas living in poverty.
Fuel poverty impacts health, exacerbates social inequality, and has economic consequences. It affects vulnerable groups disproportionately, forcing choices between basic needs like heating and food.”
Fateh Belaïd
While traditional measures of poverty look at levels of disposable income before essentials, including housing and fuel, are paid for, some economists argue that this is no longer the best approach. Instead, they say poverty levels should be assessed only after people and families have paid for these essential needs. As both fuel and housing costs have spiked in recent years, this kind of calculation would see much higher poverty levels.
The team reported that fuel poverty in Egypt affects 7.4% of the population, housing poverty 10.5%, and combined fuel-housing poverty 16.4%. “Fuel-poor households typically comprise large families in detached houses, headed by people with limited education,” Belaïd says. He notes that these findings highlight the link between energy affordability, housing conditions, and socioeconomic factors.
“It is crucial to have integrated policies that address housing and energy,” Belaïd says. “This includes lowering energy costs, improving energy efficiency, and creating a dedicated entity to assess and help reduce energy bill burden for vulnerable households.”
Reference
Belaïd F. and Flambard, V. Impacts of income poverty and high housing costs on fuel poverty in Egypt: An empirical modeling approach, Energy Policy 175, 2023.│Article
