Oil prices in Africa are expected to rise in the coming weeks due to the effects of rising or rising global oil prices, according to analysts.
On Tuesday, crude oil prices rose to more than $ 80 a barrel for the first time in more than three years.
What happened?
The relaxation of the Covid-19 epidemic, the availability of vaccines, the resumption of international air travel, and the return of economic activity as the world returns to its normal state after the catastrophe, has increased demand for oil, and prices have skyrocketed...
Oil expert Patrick Obath says: "Oil supply is low compared to demand. We expect prices to continue rising in the next few months and may come out with another surprise as demand increases during the winter in Europe and the United States. . "
Why can't oil producers in Africa avoid this?
Many African countries are expected to suffer as they rely on crude oil for their energy needs.
Diran Fawibe, an economist from International Energy Services, says: "In Africa, although there are few oil-producing countries like Nigeria and Angola, some non-oil-producing countries will increase prices because they will have to import at higher prices than before, and some those countries are already beginning to face the problem of balancing their budgets. "
This means bad news for a country like Kenya that has witnessed a sharp rise in oil prices over the past few months. In September the country's authorities increased the price of petrol to $ 1.22 per liter, in Nairobi, a 6 percent increase from last month, the largest increase in the last decade.
On Monday this week, the Court overturned the Kenya Revenue Authority's (KRA) plans to increase fuel tariffs. In the decision, Judge James Makau ruled that the decision to allow the tariff would be risky for Kenyans due to further oil prices.
Oil prices are often seen as a measure of economic activity. Fuel costs are a key factor in the cost of living for many countries, with a direct impact on production costs, electricity prices, and commodity prices.
Ken Gichinga, an economist from Mentoria Consulting, says, "The record of rising oil prices will lead to rising business costs."
How are oil producers like Nigeria, Angola affected?
If the price goes up it would probably be a good thing for these big oil producers in Africa, but it is unclear if they will be able to benefit from it.
Nigeria and Angola and are affected at least temporarily due to poor investment, which means they do not produce to the required quality and standards.
"If Nigeria were able to produce, it could take advantage of this rising price, but it is not so at the moment because Nigeria is producing less," says economist Diran Fawibe.
Rising global oil prices may increase revenues in the short term, but the real value will be realized when oil producers can produce and meet supply needs.
Bismark Rewane, a Nigerian economist, says: "Because Nigeria is currently importing oil products, you will see that the price of oil at the pump goes up to 17 cents per liter. That price of oil or if they decide to fix it will have an impact on society. "
What to do?
Countries that produce and sell oil in the world through their union (OPEC) are expected to meet on October 4. Some analysts hope that perhaps those countries could increase the oil supply. The move will help the country as it expands its production and succumbs to rising oil prices.
Michael Famoroti, a senior economist from Stears, says "The future of oil supply remains in the hands of OPEC and how it will allow its members to expand mining. over the past 18 months.
I expect concrete steps to be taken by OPEC before the end of the year, but I do not expect them to make any major changes at next week's meeting. "
