Petrol price horror
Petrol prices have soared, leading to crises in many countries. You have probably heard that Sri Lanka no longer has enough foreign currency to purchase imported oil and gas. People by the thousands have been lining up for what little petrol and cooking gas is left, while most others are staying home as transport is limited.
Sri Lanka is not the only country facing a crisis because of high energy costs triggered by crude supply tightness resulting from sanctions against Russia. People in many countries now have to buy petrol at the highest prices they have ever seen. Prime Minister Ranil Wickremesinghe announced last Monday that Sri Lanka was down to its last day of petrol and the next couple of months would be the most difficult ones for its citizens. The announcement led to even more widespread protests against the president and government. To fix its current situation, Sri Lanka needs $75 million in foreign exchange to pay for essential imports. The Sri Lankan rupee has depreciated to 365 to the US dollar, from around 200 in early March when the economic crisis began to worsen. In addition, the government intends to print more money and proposes to privatise the country’s flagship airline to keep the economy afloat. This raises the risk of inflation rising to as much as 40% in the coming months, further exacerbating economic conditions.
Petrol crisis in Africa too
In South Africa, the Central Energy Fund (CEF) has said that diesel and gasoline car owners could face significant fuel price increases in June if the current fuel levy cut is allowed to expire at the end of May as planned.
The levy was cut in April to help cushion the impact of high oil prices. If it ends, the government says pump prices could climb by as much as 3.50 rand a litre to an average of around 25 rand — equivalent to 55 baht.
In Kenya, oil is an essential commodity for transport and industrial production, electricity generation and water provision. Now, this important commodity is in shortage.
Like many countries in Africa, Kenya must import fuel mostly from the Middle East. As the price gets higher Kenyans will have to dig deeper into their pockets as fuel prices increased by 5.50 shillings a litre from May 15. Apart from soaring prices, Kenya is also experiencing hoarding in the oil market in anticipation of higher international prices. Established marketers have stopped supplying fuel to small retailers in the countryside, prompting consumers to crowd nearby towns in search of supplies.
However, the government has said it will continue to utilise the petroleum development levy to cushion customers from unusually high prices.
No shortage yet but prices at record high
Some countries are not facing fuel shortages yet, but prices are skyrocketing. For example, in the United Kingdom petrol is currently at a record high of 181 pence (78 baht) and diesel is at 183 pence. This has intensified the cost of living crisis in a country where the April inflation rate was 9%. New Zealanders have also woken up to a new petrol price record. Fuel prices had picked up because oil prices had risen based on the prospect of the European Union banning Russian imports. The New Zealand dollar is also falling, which has pushed up the cost of imports for consumers there.
In Nepal, The Nepal Oil Corporation (NOC) raised petrol prices by 10 paise a litre to a record-high average of 234 rupees (64 baht). A lack of affordable petrol affects not only transport but also industrial production and electricity generation. Furthermore, skyrocketing petrol prices will increase logistics and high refining costs will push up the prices of fruits, vegetables and packaged milk, hurting citizens.
Of course, governments can’t protect citizens from the global situation, but they must provide significant support as much as they can to help people in their countries survive the current challenges.
Sources:
https://edition.cnn.com/2022/05/16/asia/sri-lanka-fuel-economic-crisis-intl-hnk/index.html https://www.the-star.co.ke/news/2022-05-14-kenyans-to-dig-deeper-into-their-pockets-as-fuel-price s-increase/ https://theconversation.com/kenyas-fuel-crisis-how-the-countrys-subsidy-system-works-181361 https://www.stuff.co.nz/business/300587481/petrol-price-hits-record-warning-more-increases-to-co me https://businesstech.co.za/news/energy/586918/here-is-the-expected-petrol-price-for-june-4/ https://www.globalpetrolprices.com/gasoline_prices/