By Vijay Jayaraj
The war in Ukraine is increasing and residents are fleeing the city with Russian forces showing no signs of retreating. What does this have to do with the lives of billions of people living far from war? Oil prices increase.
The conflict caused an increase in international oil prices, which has now passed $130 per barrel, the highest level in 13 years. As a result, gas prices at pumping stations globally will rise even further.
As the biggest consumers of automotive fuel, car drivers in the US and Europe are feeling the pinch economically. However, the situation is much more dire for populations of developing countries, who have much smaller buffer zones to combat life-threatening shortages.
Take for example Nigeria, Africa’s largest economy ($514 billion). Neither the size of the economy nor the presence of crude oil storage facilities are enough to insulate the country from a price shock. Nigerians have been struggling with a month-long fuel shortage due to quality-related import restrictions. While government subsidies reduce the impact on gasoline users, there is no such support for diesel engines.
Diesel is being sold at Naira 625 per liter in Lagos and Abuja, 30% higher than two weeks ago. Diesel prices are expected to touch 650 and . soon interrupt Daily life. Nigeria is famous for its energy poverty, with only 40 percent out of 193 million population has access to electricity. Rising fuel costs will plunge millions more people into energy poverty.
In neighboring West Africa Ghana, which is a net exporter of oil, fuel prices have rise significantly in the first quarter and is affecting all types of businesses. For a country already in The economic crisis is taking place caused by debt, rising gasoline and diesel prices have become a nightmare.
Although Ghana exports high-quality crude oil, it does not have enough refinery capacity to convert domestic oil into finished oil. Like Nigeria, it depends on imports of refined products. Currently, 80% of the total finished petroleum products are imported. Inflation rate will increase due to possible fuel prices 6 percent increaseplunging households into further turmoil in what was initially is said to be the fastest growing major economy in Africa.
In Asia, the least developed economies that have caught up with the decades-long green movement have failed to invest in fossil fuel technology and now face unusual import bills due to crude oil prices. international increase.
Last month, Thailand’s inflation rose to a 13-year high at 5.28%. Talk to Al Jazeera, Chairman of the National Council of Shippers of Thailand said, “The geopolitical situation, global inflation, the pandemic – Thailand still has a high number of cases – and freight costs are still very high. All of that will definitely hurt our growth.”
Neighboring Philippines is also in murky waters, with gasoline prices expected to rise by 11 Philippine Pesos and eventually by one extra 20 pesos at the end of March. The record high of 100 pesos per liter for gasoline will put small businesses and households in dire straits.
In short, the victim of higher energy prices is economic growth and the long battle against poverty, which makes life harder for the billions of people who struggle with malnutrition and disease. .
A simple solution is to reverse the anti-fossil fuel policies that cause shortages and put the interests of the people first.
Vijay Jayaraj is a Research Associate at CO2 Alliance, Arlington, Va., and holds a Master’s degree in environmental science from the University of East Anglia, UK. He resides in Bengaluru, India.
This commentary was first published by American thinker March 13, 2022.
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