Cost of the fossil fuel crisis - Wales
How have surging global prices led to increased gas, electricity, and road fuel costs in Wales and how this has affected Welsh households, road users, and business and industry?
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Key findings
- Welsh consumers faced £5.64bn in additional direct costs during the crisis, driven entirely by spikes in global oil and gas prices.
- Households bore £3.14bn in excess direct costs, averaging the equivalent of £2,285 per home. Residents in some of the most deprived areas of Wales, where average household incomes are lowest – including Blaenau Gwent, Merthyr Tydfil, Rhondda Cynon Taf, and Newport – have paid a greater proportion of their income on excess energy costs than households in more affluent areas of Wales.
- Industrial users incurred £0.95bn in excess energy costs, while commercial, agricultural and public sector organisations faced £1.1bn.
- Non-domestic road fuel costs added a further £440m, shared across all sectors.
- Flintshire and Wrexham experienced the highest non-domestic cost increases, reflecting their high concentration of energy intensive industrial activity.
- All 22 Local Authorities saw substantial household impacts, with variation driven by differences in energy consumption patterns and exposure to standing charges.
- Wales remains highly exposed to global fossil fuel price volatility, with significant economic consequences.
The fossil fuel crisis has had an enormous economic toll on Wales. Across Wales, higher fossil fuel prices during the crisis forced consumers to spend an extra £5.64 bn on gas, electricity and road fuels compared to pre-crisis levels.
Just over half of this fell directly onto households, primarily in the form of higher energy bills. The industrial sector was hit by energy bill cost increases of just under £1bn, while the ‘other’ category, encompassing commercial, agricultural and public sectors, incurred £1.1bn. These last two categories also shared £440 million in extra road fuel costs.
| Consumer/cost group | Total excess cost |
|---|---|
Domestic consumers | £3.14 bn |
| £2.14 bn |
| £0.44 bn |
| £0.56 bn |
Industrial energy bills | £0.95 bn |
Other energy bills | £1.10 bn |
Non-domestic road fuels | £0.44 bn |
Wales total | £5.64 bn |