2023-05-05 17:56:00
(Ecofin Agency) – While crude oil prices are still at a low level on international markets, for African households a double loss is looming on the horizon: their oil will be sold cheaper, while they will have to continue to pay a high price for gasoline.
On the international markets, the price of the barrel of the various categories of oil began the day of May 5, 2023 with a very slight increase, but we still remain below $75 per barrel for the resources of the three major African producers, Nigeria. , Angola and Algeria. After having rebounded in early April 2023, after the announcement by the organization of petroleum producing countries of a reduction of more than 1 million barrels in their daily production.
Many industry analysts believe that prices are unlikely to recover any time soon. According to experts from Standard Chartered Bank quoted by the platform Open Oilthe fall in production by the members of OPEC+ will just reduce the stocks that have been provisioned by various countries, in particular the United States, which are large consumers of hydrocarbons.
Other analysts also suggest that the oil trading market remains concerned about the state of the recovery in the world’s major economies. In the US, the pace of job creation continues to be slow and for the economy this means less consumption. And Europeeven though inflation is falling, the economic recovery remains very slow and several governments are facing budgetary pressures.
Finally, according to a report by Archyde.comthe decision to limit the value of a barrel of Russian oil to $60 leads to distortions in the market, because large consumers such as India or even China are suspected of massively buying this oil and therefore the share sold on the other markets remains more abundant than demand.
In this logic, we can expect low oil prices at least until November 2023. Even for Goldman Sachs, which forecasts a rebound in oil prices in the future, its forecasts are limited to $107 per barrel. , still far behind the peak of $125 reached in June 2022. The question arises, however, whether prices at the pump will fall in Africa.
Nothing is less certain as the energy bill is considerably reducing the purchasing power of incomes in the region. In Nairobi, Kenya, fuel-efficient cars allow households to offset a gas price that is almost $15. But the price of this vehicle which exploded is hardly accessible for new workers. In several countries of the West African Economic and Monetary Union (UEMOA), gasoline prices have sometimes increased by 30%. In Nigeria, people are still wondering whether to stop subsidizing.
If the lull in the energy crisis is already benefiting the American and European markets (to a lesser extent), this is not the case for Africa where prices are adjusting much more slowly and returning with difficulty to their levels of before the crises. In many of these countries, however, the price of a liter of gasoline or diesel is on average $1.5. An amount that sometimes approaches or exceeds the hourly minimum wage.
One reason for this situation is that the petroleum products chain is quite compartmentalized, even if sometimes it is dominated by the same players. The latter thus benefit from the dynamics upstream (production) or downstream (distribution) to balance their financial performance and keep the promises made to their investors. For the first quarter of 2023, the commitment was kept for major groups, whose profits reached record levels for the period, partly thanks to downstream distribution revenues.
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