Short- and long-term impacts of the energy crisis in Sweden

This briefing by the Stockholm Environment Institute analyzes the distributional welfare impacts of the 2022 energy price crisis in Sweden. It examines how electricity and fuel price increases affected different income deciles and geographical regions, evaluating the effectiveness of policy responses such as fuel tax reductions and direct compensation. The report highlights that low-to-middle income groups and residents of sparsely populated areas were most affected, and argues that short-term subsidies may conflict with Sweden's long-term climate goals of net-zero emissions by 2045.

• Low to middle income groups in Sweden were the most severely impacted by energy price increases, with an average welfare impact of –3.8% across all income groups. Specifically, income deciles 3, 4, 5, and 7 experienced the highest impacts, exceeding –4%.
• Geographical location significantly influenced welfare impacts, with sparsely populated areas experiencing a higher average impact of –4.3% compared to –2.6% in densely populated areas, a difference of 1.7 percentage points.
• Energy price increases in Sweden for 2022 varied by fuel type: electricity rose by 34% (near the EU average of 35%), diesel increased by 48% (above the EU average of 37%), and petrol rose by 31% (above the EU average of 26%). Natural gas price increases were well below the EU average of 68%.
• Direct compensation targeted at households below the poverty line (Scenario 2) effectively reduced negative welfare impacts for the first income decile to –0.6%, but failed to significantly support the most affected low-to-middle income groups (deciles 3 to 5).
• The Swedish government's temporary reduction of gasoline and diesel taxes by 80 öre per litre (approximately EUR 0.07) primarily benefited high-income groups; approximately 95% of the richest 20% of households showed decreased transport fuel expenditures.
• Short-term energy crisis measures, such as pausing the greenhouse gas reduction mandate for transport fuels and reducing fuel taxes, may undermine Sweden's climate targets for 2030 and 2045 and risk altering long-term consumer behaviors.

APA

Xylia, M., & Suljada, T. (2023). Short- and long-term impacts of the energy crisis in Sweden. Stockholm Environment Institute. https://www.sei.org/wp-content/uploads/2023/04/energy-crisis-sweden-sei2023.026-corrected.pdf

Chicago

Xylia, Maria, and Timothy Suljada. Short- and long-term impacts of the energy crisis in Sweden. Stockholm Environment Institute, 2023. https://www.sei.org/wp-content/uploads/2023/04/energy-crisis-sweden-sei2023.026-corrected.pdf.

Wikipedia

{{cite report |last1=Xylia |first1=Maria |last2=Suljada |first2=Timothy |title=Short- and long-term impacts of the energy crisis in Sweden |publisher=Stockholm Environment Institute |date=April 2023 |url=https://www.sei.org/wp-content/uploads/2023/04/energy-crisis-sweden-sei2023.026-corrected.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{xylia2023short, author = {Xylia, Maria and Suljada, Timothy}, title = {{Short- and long-term impacts of the energy crisis in Sweden}}, institution = {Stockholm Environment Institute}, year = {2023}, month = apr, url = {https://www.sei.org/wp-content/uploads/2023/04/energy-crisis-sweden-sei2023.026-corrected.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }