The high share of energy costs makes Moldovans vulnerable to energy price shocks, but even before the energy price hikes, the country had problems with access to energy resources - WB.
This is stated in the study of the World Bank experts on the access of the population to energy resources in Moldova, which was presented within the Economic Press Club meeting. As noted, the problem of access to energy resources is a long-standing problem in Moldova, especially affecting poor and rural households. In 2021, about 30% of Moldovans could not afford to adequately heat their homes, which is more than 4 times compared to the EU-27 average. At the same time, the burden of energy costs is unevenly distributed: almost half of the population is among the poorest, while 40% of rural residents struggle to keep their homes adequately heated. In contrast, only about 10% of the richest citizens and 16% of urban dwellers face similar problems. Even before the energy price hikes in winter 2021, Moldova had problems with energy access. In 2019, before the rapid rise in energy prices and the start of the COVID-19 pandemic, the proportion of Moldovan residents who could not properly heat their homes was 5 times higher than the EU-27 average. Moldova's energy costs are among the highest in the region, making it particularly vulnerable to energy price spikes, a situation exacerbated by its status as one of the poorest countries in Europe. Moldova has the 4th highest share of energy costs compared to 10 selected countries in the region, with only Poland, Serbia and Armenia spending more. In 2021, the average Moldovan household spent about 16% of its budget on energy needs, with the poorest 40% spending up to 20% and 60% spending more than 10%. Even middle class households with consumption 150-200% above the poverty line faced high energy costs, while the richest spent about 10% of their budget on energy needs. These results point to widespread vulnerability to energy prices. Despite high vulnerability at all levels, households in different localities were vulnerable to different types of energy price shocks in 2021. Urban and southern households, which are more connected to the gas grid, are more vulnerable to natural gas price fluctuations, while residents of Chisinau are disproportionately affected by centralized heating price hikes. Rural households, which typically use less modern fuel sources, are more susceptible to solid fuel price increases. Given near universal access to electricity and high costs, most households are vulnerable to electricity price increases. // 16.05.2024 - InfoMarket.
