The Ukraine-Russia conflict has caused panic and spike in prices, but could prompt a long-term shift towards sustainability.
This was the perspective of Comrade Bala Zakka, an energy analyst, who appeared as guest speaker in The Daily Africa Summit on the topic: “Ukraine-Russia War: Embargoes, Oil Market and Africa Economy”, Friday in Lagos.
The analyst stated that Africa is affected because of leadership dorsility ,misplaced Pan African vision, ties to historical background, lack of internal trust and confidence, non implementation of Regional vision and non implementation of continental Vision. Hence, Africa cannot crystallise its enormous wealth and natural resources.
The conflict has roiled the markets, driving oil and gas prices to their highest levels in nearly a decade and forcing many countries to reconsider their energy supplies.
“It has impacted because Russia has huge deposit of oil and gas, when we talk about crude oil, we have OPEC led by Saudi Arabia and Non-OPEC led by Russia. To that extent, since Russia is under sanctions, supply has been affected and disrupted.
Russia supply more than the 40 per cent of natural gas requirements in Europe, so if Russia cuts that now the whole of Europe is likely to be asphyxiated”. He said.
Response of the global oil market
“The global oil market has responded already, we have seen prices of crude oil going up, we have seen all kinds of energy requirement and demand, when you go to countries that are not having crude oil, unfortunately, you will see prices of what we called distillates or refined petroleum products going up but we should not tie it to the case of Nigeria.
The case of Nigeria, why we are not having enough petrol, enough diesel, enough aviation fuel, enough kerosene is because internally, we decided not to domesticate, because if we have been domesticating and have functional refineries, we are not supposed to be talking about aviation fuel now, but there is no plan in Nigeria.
We know what is happening”. Comrade Bala said.
“Lack of diesel and the cost of diesel have made businesses and strategic sectors to suffer and I can tell you companies income tax will go down this year, personal income tax will go down because many people are likely to be fired. You see what is going on in the aviation industry, they are firing staff, flight cancellations and delays.
We have decided not to deregulate the Nigerian downstream sector of the oil and gas, but predicate it on import which is unfortunate knowing that we have a very weak currency and a very weak economy”. The analyst said.
