Fiscal Policy Responses to the Energy Price Shock – Session 2

Recent developments in global energy markets are once again placing pressure on households, businesses, and public budgets. Governments are responding in different ways: while some have introduced broad-based fossil fuel subsidies, tax reductions, or price controls, others are pursuing more targeted and temporary support measures, often combined with efforts to reduce long-term dependence on fossil fuels and strengthen resilience to future price shocks.

Against this backdrop, this upcoming webinar on Fiscal Policy Responses to the Energy Price Shock, will focus on government responses to rising energy costs and the implications for fiscal policy, social protection, energy, and the clean energy transition. This is the second webinar in a two-part Coalition of Finance Ministers for Climate Action (CFMCA) series on this topic.

The webinar aims to provide a space for finance ministries to exchange experiences and lessons learned from current and past energy price crises. The discussion will focus in particular on how short-term support measures can protect vulnerable households and businesses while preserving price signals, maintaining fiscal sustainability, and supporting longer-term energy transition objectives.

It will begin with an overview presentation examining recent energy price developments and emerging government responses across countries. The presentation will draw on lessons from previous crises, including the 2022/23 energy price surge, and discuss different policy approaches currently being implemented, ranging from blanket fuel subsidies and tax reductions to more targeted support mechanisms such as cash transfers, social assistance, and support for specific sectors.

The session will then provide participating countries with an opportunity to share practical experiences regarding the implementation of support measures, including the role of existing delivery systems, targeting mechanisms, data availability, and institutional coordination. In doing so, the session aims to facilitate peer exchange on approaches that can reduce exposure to future fossil fuel price volatility while ensuring social and political feasibility.