“NOESSU FICIENTE” —that’s not enough.that is message Ecuadorian protesters delivered to the country’s president last week after saying they would cut prices for both regular gasoline and diesel by 10 cents in response to demonstrations of riots over fuel and food prices.
Anger and fear of the energy prices that exploded in Ecuador are happening all over the world. In the United States, the average gasoline price, which jumped to $ 5 per gallon, is straining consumers and forcing President Biden into intolerable political calculations ahead of this fall’s midterm elections.
But in many places, the leap in fuel costs is much more dramatic, and the subsequent misery is much more serious.
Family members are worried about how to keep the lights on, fill the car’s gas tank with water, warm the house, and cook. Companies are addressing rising transportation and operating costs, as well as demanding higher wages from workers.
In Nigeria, stylists use the light of their cell phones to cut their hair. You can’t find an affordable fuel for a gasoline-powered generator. In the UK, it costs $ 125 to fill the tank of an average family-sized car. Hungary Prohibits drivers from purchasing more than 50 liters of gas per day at most service stations. Last Tuesday, Ghanaian police fired tear gas and rubber bullets at demonstrators protesting the financial difficulties caused by rising gas prices, inflation and new taxes on electronic payments.
The tremendous rise in fuel prices has the potential to rewire economic, political and social relationships around the world. High energy costs have a chain effect, foster inflation, force central banks to raise interest rates, curb economic growth and hinder efforts to combat devastated climate change.
Russia’s invasion of Ukraine, The largest exporter of oil When gas With entry into the global market and subsequent retaliatory sanctions, gas and oil prices are rampant. The unfolding disaster is in addition to the two-year cataclysm caused by the Covid-19 pandemic, intermittent shutdowns, and supply chain roars.
Soaring energy prices are the main reason the World Bank revised last month’s economic forecasts, with global growth slowing even slower than expected, to 2.9% this year, about half of 2021. “For many countries, a recession will be inevitable,” Malpas warned.
In Europe, Russia’s excessive reliance on oil and natural gas makes the continent particularly vulnerable to high prices and shortages. In recent weeks Russia has plummeted gas supplies to some European countries.
Throughout the continent, countries are preparing emergency ration blueprints, including sales caps, reduced speed limits, and reduced thermostats.
The poorest and most vulnerable people will feel the most severe impact, as is usually the case in the event of a crisis. The International Energy Agency Last month, rising energy prices warned that it meant that an additional 90 million people in Asia and Africa would not have access to electricity.
Expensive energy radiates pain, contributes to rising food prices, lowers living standards and exposes millions of people to starvation. Higher shipping costs increase the price of all goods that are trucked, transported or flown, such as shoes, cell phones, soccer balls and prescription drugs.
Understand inflation and its impact on you
Eswar Prasad, an economist at Cornell University, said: “The simultaneous rise in energy and food prices is a double punch for the poor in virtually every country. Long term.”
In many places, livelihoods have already been turned over.
49-year-old Dione Dayola leads a consortium of about 100 drivers cruising Metro Manila with passengers on a minibus called a jeepney. Currently, only 32 of these drivers are on the road. The rest either left to look for another job or begged.
Before the price of the pump started to rise, Dayola said he would bring home about $ 15 a day. Now it’s down to $ 4. “How do you expect to live with it?” He said.
To increase his family’s income, Dayora’s wife, Marichu, sells food and other goods on the streets, but his two sons sometimes wake up at dawn and spend about 15 hours a day in jeepneys. , Want to earn more than they do. spend.
The Philippines buys very little oil from Russia. But in reality, it doesn’t matter who you buy oil from. Prices are set in the global market. Everyone is bidding on everyone else, and no country is isolated, including the United States, the world’s second-largest oil producer after Saudi Arabia.
Sustainably expensive energy is causing political dissatisfaction not only in places where the war in Ukraine feels distant or irrelevant, but also in countries that oppose Russia’s aggression.
Last month, Biden proposed suspending a small federal gas tax to reduce $ 5 per gallon of gasoline puncture wounds. And last week, Mr Biden and Group 7 leaders discussed Russia’s export oil price limits. This is a move aimed at reducing the burden of painful inflation on consumers and reducing President Vladimir Putin’s export revenues. Used to wage war.
Price increases are everywhere. In Laos, gas is currently over $ 7 per gallon. GlobalPetrolPrices.comIn New Zealand, it’s over $ 8. In Denmark, it’s over $ 9. In Hong Kong, it’s over $ 10 per gallon.
Leaders of three French energy companies are calling for “immediate, collective and large-scale” efforts to reduce the country’s energy consumption, a combination of shortages and rising prices. Threatening “social cohesion” Next winter.
In poor countries, the threat is even more serious as governments are torn between providing additional public support that requires them to take on burdensome debt and facing serious anxiety.
In Ecuador, government gas subsidies were enacted in the 1970s, and there was fierce opposition every time authorities tried to abolish them.
The government spends about $ 3 billion annually to freeze the price of regular gasoline to $ 2.55 and the price of diesel to $ 1.90 per gallon.
On June 26, President Guillermo Lasso proposed reducing each of these prices by 10 cents, but the powerful Ecuadorian Indigenous Peoples’ Federation, which led the two-week protest, rejected the plan and said it was 40 cents. Requested a 45 cent reduction. On Thursday, the government agreed to cut prices by 15 cents, and the protests subsided.
“We are poor and can’t afford to pay for college,” said Maria, who traveled from a village near Cotopaxi volcano to the capital of Kito, where Central State University is used to protect hundreds of protesters. Yanmitakushi, 40, said. “Tractors need fuel,” she said. “Farmers need to be paid.”
According to economic analyst Andre Albuha, gas subsidies, which represent nearly two percent of the country’s gross national product, are starving other sectors of the economy. Health and education spending has recently been reduced by $ 1.8 billion to ensure the country’s large debt repayments.
Mexican President Andres Manuel Lopez Obrador uses money earned from the country’s crude oil to subsidize domestic gas prices. However, analysts say the government’s income from oil will make up for the money lost by oil by temporarily abolishing taxes on gas and providing additional subsidies to companies that operate gas stations. I warn you that you can’t.
In Nigeria, where public education and health care are in dire straits and the state cannot ensure the electricity and basic safety of its citizens, many feel that fuel subsidies are one of the things the government does for them. I am.
Kora Salami, who owns a Valentino unisex salon on the outskirts of Lagos, needed to find an affordable fuel for the gas generator needed to run the business. “If they stop subsidizing it,” he said, I don’t think we can do that either. … ”His voice was cut off.
In South Africa, one of the world’s most economically unequal countries, rising fuel prices have created another fault line.
Even the party’s traditional allies have seized fuel costs as a failure of political leadership, as President Cyril Ramaphosa is campaigning for reelection at the ruling party of the African National Congress in December.
In June, after fuel surpassed $ 6 per gallon, a record high, the Congress of the Confederation of South African Trade Unions marched in Durban, a city already destroyed by violence and looting last year, and was hit by floods this year. I did. Trade union spokesman Shizwe Pamura said soaring fuel prices were “catastrophic.”
The fast-paced spiral of gas and oil prices is driving investment in renewable energy sources such as wind, solar and low-emission hydrogen. But if clean energy is driving investment, so is fossil fuels.
Last month, China’s Prime Minister Li Keqiang called for increased coal production to avoid power outages between the fierce heat waves in the northern and central parts of the country and the subsequent increase in air conditioning demand.
Meanwhile, in Germany, a coal-fired power plant that was scheduled to retire has been rekindled, diverting gas to winter storage and supply.
There is almost no relief in sight. Fatih Birol, Managing Director of the International Energy Agency, said:
At this point, Virol said the only scenario for fuel prices to fall is the global recession.
The report was contributed by Jose Maria Leon Cabrera From Ecuador Lindsey Tutel From South Africa Ben Eze Amal From Nigeria Jason Gutierrez From the Philippines Oscar Lopez From Mexico Ruth McLean From Senegal.
