Oil and gas: would rationing save us from soaring prices?

Rationing and other saving measures may be brought in to protect oil and gas supplies. Dr Irina Heim examines why, in our latest Leading Insights.

The current situation

This week the German government declared an ‘early warning’ of a possible emergency to prepare for the risk of natural gas flows from Russia being cut off. That could result in the introduction of gas rationing to regulate the energy demand. Rationing has long been considered the stuff of history books: Americans rationed gas during WWII and the 1970s oil shocks. In the 1970s, the world economy experienced two oil prices shocks in 1973 and 1979 due to the interruption of Middle Eastern oil exports.

Nowadays, it is increasingly likely that saving measures will be needed to reduce gas consumption by households and industry, especially in advanced economies. Undoubtedly, actions from governments and citizens will be necessary. Gas is still widely used by households for heating. Germany introduced regulations in 2021 to mandate the installation of solar power systems in newly constructed and renovated buildings and car parks.