Source: The Conversation – Canada – By Henri Chevalier, PhD student at School of Environment, Resources and Sustainability, University of Waterloo
With global oil supply under pressure from the U.S.-Iran war, governments may need to bring back tools many assume belong to the past: rationing and price controls.
Some countries are already moving in that direction. The Philippines has declared a national emergency in response to energy supply risks, while South Sudan has begun rationing electricity in its capital, Juba, and Mauritius has imposed restrictions aimed at reducing consumption and limiting waste.
These developments echo historical precedents. My research, recently published in Sustainability: Science, Practice and Policy, draws on the case of British clothing rationing during the Second World War to show that when essential goods become scarce, governments cannot rely on price alone to manage the crisis.
When left to market forces, access to basic goods becomes dependent on those who can pay most, meaning lower-income households are often hit hardest.
A global supply shock
Since U.S. and Israeli strikes on Iran triggered a wider conflict and effectively shut down shipping through the Strait of Hormuz, global oil supply has fallen by about eight million barrels per day — roughly eight per cent of world demand.
Read more:
What is the Strait of Hormuz, and why does its closure matter so much to the global economy?
The disruption of a route carrying about 20 per cent of the world’s oil supply is pushing prices up and availability down, creating conditions similar to those Britain faced before rationing.
In the face of such an oil shock, governments around the world should learn from the British clothing rationing system by implementing rationing and price controls.
That was the case during the oil shocks of the 1970s in Canada. Governments kept domestic oil prices under control and helped cover the cost of more expensive imports.
Canada also designed a national gasoline rationing plan in 1979, using printed stamps to limit private motorists’ fuel use while giving priority access to ambulances, freight carriers and farmers.
What history can teach us
The United Kingdom faced major supply disruptions during the Second World War, prompting the introduction of rationing to mitigate the effects of material shortages, inflation and mounting pressure on civilian supply.
To achieve this, the British rationing system relied on three main policy tools.
The first was a coupon system. Introduced in 1941, coupons were tied to material use rather than price. Each person received a fixed number of clothing coupons per year, starting at 66 per person (about two-thirds of pre-war levels) and fell to 36 by 1946.
Each type of garment required a set number of coupons depending on how much material it used. For example, a wool dress might cost around 11 coupons, while a shirt might cost five and a pair of stockings two. Cutting just two coupons per person saved about 27 million metres of fabric.
The second was the Utility Clothing Scheme. Launched in 1942, it provided affordable, durable clothing through strict standards and fabric-saving rules. Shortening men’s shirts by five centimetres and removing double cuffs saved 3.3 million square metres of cotton. By 1943, the scheme covered 80 per cent of British clothing production.
The final was price controls. The Board of Trade was granted the power to fix prices and margins across production and distribution, helping keep “Utility” clothing stable or cheaper while non-Utility prices rose, with Utility items costing about half as much as non-Utility clothing.
Managing scarcity and fairness
These policies led to three major consequences. First, they reduced overall consumption. Under clothing rationing, wool spinning fell by 44 per cent and hosiery industry yarn by 37 per cent, while civilian textile supply and clothing consumption per person dropped by 67 per cent.
Clothing and footwear purchases per capita declined by 34 per cent. Despite six years of war, civilians had access to less than four years’ worth of normal clothing supplies.
Second, they ensured fair access to essentials. Price-controlled rationing helped ensure people still had decent clothing, reducing poverty and preventing severe shortages.
Third, they reinforced a culture of repair and reuse. Building on the repair culture already present in the 1930s, campaigns such as “Make Do and Mend” promoted repair, remaking, modular design and the reuse of materials such as blankets, blackout fabric, food bags, parachute silk, wooden clogs and even dog fur yarn.
The rationing system not only cut consumption and aligned demand with supply, but also prevented scarcity from becoming a windfall for producers and a punishment for low-income households. It also reduced waste and discouraged overconsumption — all valuable lessons in today’s global oil supply disruption.
That said, the system was not without drawbacks. Britain’s rationing system was also technocratic, bureaucratic and not very democratic.
What governments can do now
Today, the real issue is not whether governments intervene, but whether they do so fairly and effectively.
On March 20, to address the current oil supply squeeze, the International Energy Agency proposed a series of demand-reduction measures, including expanding remote work, lowering speed limits, stengthening public transit use and increased car-sharing use.
While useful, these measures remain short-term fixes. If shortages deepen, governments — including Canada’s — may need to consider the following structural responses:
1. Prepare fair fuel-allocation systems if shortages deepen.
Some governments are already moving in that direction. Sri Lanka introduced a QR code-based fuel authorization system to regulate petrol and diesel distribution, with weekly quotas.
2. Cap excessive prices and margins on essentials.
In Canada’s concentrated fuel and grocery markets, refiners and downstream food firms can widen margins at the expense of consumers. Refining profits surged as pump prices rose faster than crude costs, while processors, distributors and retailers captured 83 cents of every food dollar spent in Canada.
Canada could learn from Austria, Greece and Spain, which have respectively capped fuel retailer margins, grocery margins and rents recently.
3. Use the crisis to build structural economic transformation.
Recurring resource, geopolitical and ecological crises point to the need to reduce dependence on fragile global supply chains, accelerate decarbonization and reorganize the economy around scarce resources through reduced advertising and democratically decided material caps.
This would protect essential needs first, reduce unnecessary production and consumption, and prioritize durable, repairable and sustainable goods.
For those interested in exploring this research further, a more engaging and accessible version of the study is available online.
This research was supported by the Social Sciences and Humanities Research Council of Canada, Coboom, and the HEC Montréal Foundation
– ref. As oil shortages deepen, wartime rationing offers a guide for today’s governments – https://theconversation.com/as-oil-shortages-deepen-wartime-rationing-offers-a-guide-for-todays-governments-279193