The latest round of global energy crisis, resulting in rising fuel prices could spur social unrest around the world, a New York Times report has warned.
The cost of filling a car’s tank, getting to work and cooking dinner has spiked, the report stated, as families worry over depleting resources.
In Nigeria, the report stated that stylists now use the light of their cellphones to cut hair because they can’t find affordable fuel for their petrol-powered generators.
THISDAY reports that the problem has been further worsened by local challenges of transporting the products from the depot as tanker drivers and owners seek a rise in the so-called bridging fund.
The challenge has worsened in Abuja, which has witnessed long fuel queues for more than half of this year.
At the weekend, it got worse as filling stations shut down their facilities while the NNPC stations entertained lines stretching kilometres.
In Britain, it now costs $125 to fill the tank of an average family-size car, it said, while Hungary is prohibiting motorists from buying more than 50 litres of gas a day at most service stations.
Last Tuesday, police in Ghana fired tear gas and rubber bullets at demonstrators protesting against the economic hardship caused by gas price increases, inflation and a new tax on electronic payments.
“The staggering increase in the price of fuel has the potential to rewire economic, political and social relations around the world. High energy costs have a cascading effect, feeding inflation, compelling central banks to raise interest rates, crimping economic growth and hampering efforts to combat ruinous climate change,” it stated.
The invasion of Ukraine by Russia, the largest exporter of oil and gas to global markets, and the retaliatory sanctions that followed have caused gas and oil prices to gallop with an astounding ferocity.
The unfolding calamity comes on top of two years of upheaval caused by the Covid-19 pandemic, off-and-on shutdowns and supply chain snarls.
Last month, the World Bank revised its economic forecast, estimating that global growth will slow even more than expected, to 2.9 per cent this year, roughly half of what it was in 2021 according to the bank’s president, David Malpass, who added that “for many countries, recession will be hard to avoid.”
In Europe, the report said that an over-dependence on Russian oil and natural gas has made the continent particularly vulnerable to high prices and shortages. In recent weeks, Russia has been ratcheting down gas deliveries to several European countries.
In Nigeria, where public education and health care are in dire condition and the state cannot ensure its citizens electricity or basic safety, many people feel that the fuel subsidy is the one thing the government does for them, the New York Times said.
It quoted one Kola Salami, who owns the Valentino Unisex Salon in the outskirts of Lagos, as having had to hunt for affordable fuel for the gas generator he needs to run his business. “If they stop subsidizing it,” he said, I don’t think we can even. …” His voice trailed off.
There is little relief in sight. “We will still see high and volatile energy prices in the years to come,” said Fatih Birol, the executive director of the International Energy Agency.
At this point, the only scenario in which fuel prices go down, Mr. Birol said, is a worldwide recession.
Meanwhile, supply disruptions from Libya and Norway pushed the prices of crude oil higher by about 2 per cent at the weekend, with the Brent rising by $2.71 or 2.5 per cent to $111.74 a barrel and the United States West Texas Intermediate growing by $2.81 or 2.7 per cent to $108.57 a barrel.
Libya’s National Oil Corporation (NOC) declared force majeure on crude exports from its oil terminals amid continued blockades of production and ports, which have severely crippled the country’s exports.
The force majeure comes after weeks of protests and closures amid the new rift in Libya’s political class over who should be governing the country.
The company said it was considering declaring force majeure within 72 hours unless production and shipment of oil resume in the Gulf of Sirte, which hosts the oil export terminals of Zueitina, Brega, Ras Lanuf, and Es Sider.
The state oil body stated that production has seen a sharp decline, with daily exports ranging between 365,000 and 409,000 barrels per day, a decrease of 865,000 barrels per day compared with production in normal circumstances.
In Norway, a planned strike among oil and gas workers from today could cut the country’s overall petroleum output by around 8 per cent or around 320,000 barrels of oil equivalent per day unless a last-minute agreement is found over wage demands.
Also, low crude and fuel supplies supported the oil market even as the US Dollar, which typically has an inverse relationship with crude, rose.
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