Page 51 - Nigeriaone mag 2 edition en

The effects of oil price increases on our everyday lives

Oil price rise, illustrative image

Although the price of a barrel of oil exceeded the Governments do not intervene in high-income
hundred dollar mark this year, no one has predic- market economies, leaving people in charge of
ted that it will rise up to around $150 per barrel. supply and demand. In other places, they must
Many factors contributed to this price hike, inclu- intervene and subsidize products to control the
ding an increasingly important demand from market and protect the most needy. Otherwise,
China and emerging countries and the Rus- gruntings and demonstrations might begin and
sian/Ukraine conflict has also worsened the situa- then lead to possible chaos..
tion. Other sectors may also be affected and undergo
December 2021 saw an average crude oil price of serious challenges. As the price of the barrel
$74.4, while January 2022 experienced an average increases, the cost of energy increases, which
increase of 16 percent, with larger increases affects the manufacturing sector, crafts, and other
occurring after the beginning of the Russian- types of services. The effects can be felt at both
Ukrainian crisis. A barrel of oil was close to $140 macroeconomic and microeconomic levels.
on March 6, 2022. Security can be compromised by the costs of public
Price fluctuations in the oil market are affected not lighting, especially in low-income countries where
just by predictable factors, but also and above all by it is very limited or cut down when the bills are not
unpredictable factors like wars, revolution and paid. This can lead to an escalation of violence,
natural disasters that can have devastating effects disturbances, etc.
on consumers. Some people may not realize how Energy is at the center of all activities and it has a
much the rise in a barrel's price affects their daily direct impact in our everyday life. Diversification of
lives. Oil refineries that process oil face higher energy resources is one of the most important
production costs as the price of a barrel increases, topics of the moment, but presents challenges
which will affect all economic and social sectors. during the initial stages. In order to develop a good
Carriers and other motorists are directly affected combination of energy policies there must be a
by an increase in gas prices, and the cost is passed dialogue between all stakeholders.
on to goods, which are felt on household spending.

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