Cost of the Fossil Fuel Crisis – Scotland

Dependence on oil and gas costs Scottish industry almost £2 billion.

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Total cost to Scottish economy from energy crisis is £11 billion – almost three times the Scottish Government’s total spending on education – and equivalent to around £2,260 per household.

This analysis examines the financial implications of the recent oil and gas price shocks on Scotland, detailing the distribution of increased gas, electricity and road transport fuel expenses across various regions and economic sectors. The analysis reveals that: 

  • The surge in global oil and gas markets resulted in an £11 billion spike in direct expenditure for Scottish consumers between 2021 and 2024.
  • Scottish families and individuals absorbed £5.8 billion of these excess costs, which equates to an average of £2,263 per household.
  • The most acute financial pressures at the domestic level were felt in the Shetland and Orkney Islands, as a proportion of household disposable income. Inhabitants of Dundee City, one of the areas with the lowest levels of household disposable income in the UK, were also very hard hit.
  • The industrial sector saw energy bills climb by £1.8 billion, while commercial, agricultural, and public sector organisations together faced an extra £2.6 billion.
  • A further £830 million in increased road fuel costs was distributed across the nation's non-domestic sectors.
  • Major urban and industrial hubs, including Glasgow, Edinburgh, and Aberdeen, experienced the most significant non-domestic cost increases. 

These findings underscore Scotland's continued vulnerability to international energy market fluctuations and the resulting long-term economic strain on both the nation's households and its business landscape.