Insee Analyses · September 2022 · n° 75

Soaring energy prices: its effect on inflation halved by the "tariff shield”

Between the second quarter of 2021 and the second quarter of 2022, the rise in energy prices (natural gas, electricity, and petroleum products) contributed to 3.1 points of inflation out of a total of 5.3%. Two-thirds of this effect reflected the increase in the cost of energy consumed by households for transportation and heating. The remaining third came from the impact of energy cost increases for businesses on the prices of other products. The “tariff shield” measures reduced these effects by half; without the shield, inflation between the second quarters of 2021 and 2022 would have been 3.1 percentage points higher.

Because the share of transportation and housing expenditure in their consumption basket is slightly higher, households with the lowest incomes are more strongly affected by the rise in energy prices. However, the shield measures especially cushioned inflation for the lowest incomes and oldest households.