Business
Global Food Prices Set To Soar As The Oil And Gas Crunch Continues
Oil and gas prices have risen dramatically this year as a result of under investment and recovering demand.
·Higher fuel prices are weighing on global food supply chains, with transportation and farming costs continuing to climb.
·The hardest hit will, once again, be those living in developing economies that are still struggling to recover from the impact of the pandemic.
The potential for a knock-on effect of rising fuel prices to be felt by other industries is becoming more likely, as oil and gas prices continue to rise to an all-time high, companies are finding it hard to maintain their costs and may have to shift this burden to the consumer any day now.
Petrol prices have risen higher and higher this year, as oil makes a comeback in 2021 following a difficult year of pandemic restrictions and low demand. This has, of course, been aided by the OPEC+ curbs on production that restricted oil output across member states for the first half of 2021. And while production levels are slowly rising, some countries are finding it difficult to reach new OPEC targets as they revive their oil and gas industries, meaning the global shortage continues.
Looking at the price of gasoline over the last 20 years, you can see that the global average has doubled, from $0.60 a litre in 2001 to $1.20 a litre today. This year, in particular, the increase in demand as economies open back up following over a year of restrictions, added to a supply shortage across much of the world, means prices are nearing an all-time-high.
And it seems that the trend is not over yet, with experts suggesting that motorists across Europe and Asia can expect high petrol and diesel costs well into the winter months as the Brent benchmark stays around $85 a barrel; demand for fuel increases; and taxes on motor fuel in countries such as India, France and the U.K. continue to stay at around 60 percent of the retail price of petrol and diesel. But what does this trend mean for other industries? As well as rising fuel prices, we are seeing the cost of food and drink increase, with average food prices hitting a decade high and costing around one-third more this September than last. Fuel costs cannot be blamed as the sole catalyst in rising food prices, as harvests hit by hot weather and Covid restrictions, an increase in global demand – with a dramatically cold 2020 winter and hot 2021 summer, and disruptions in the supply chain, are also to blame. But if transport and farming costs continue to rise, our food bill is likely to keep climbing.
Kavita Chacko, a senior economist at CARE Ratings in India explains, “High fuel prices put pressure on overall price levels and poses a downside risk to the recovery in mobility and the economy in general.” Moreover, “The rise in transportation costs have been feeding into costs across segments and could be a dampener for consumer spending,” she stated.
With globalisation meaning our food no longer comes from the local farm but is mostly shipped across the globe, as well as the rising price of fertilisers, the food supply chain is finding it hard to maintain stable prices.
Abdolreza Abbassian, Senior Economist at the UN’s Food and Agriculture Organisation’s told Bloomberg, “It’s this combination of things that’s beginning to get very worrying,” “It’s not just the isolated food-price numbers, but all of them together. I don’t think anyone two or three months ago was expecting the energy prices to get this strong.”
But the food supply chain is not the only thing we have to worry about when it comes to the knock-on effect of high oil prices. Any industry that relies on oil for fuel, fertilizers, petrochemicals, or any number of other related products is going to feel the pinch in the coming months, if they don’t already. This means the cost of many of our household products and basic expenses could soon increase.
This ticking time bomb has led Tom Kloza, global head of energy analysis for OPIS by IHSMarkit, to state, “every nook and cranny of the economy” could be affected. “Everything that moves tends to move cross-country by truck or by train, so we’re looking at a more expensive year for that.”
Essentially, anything that is used on freight transportation and any industry that relies on fuel or petrochemicals will likely be affected by the ongoing hike in oil prices. And while consumers are worried about petrol and diesel prices at present, this is just the tip of the iceberg.
The hardest hit will, once again, be those living in developing economies that are still struggling to recover from the impact of the pandemic. With an uneven economic recovery, due to low vaccine rollout figures and Covid restrictions needing to continue across several low-income countries, high fuel prices and the spillover effect on other industries, particularly food, could see governments having to provide economic stimuli to the poorest populations, as well imposing price caps on fuel.
One thing’s for certain, it’s going to get worse before it gets better. Those working in agriculture and industry are already taking the hit and it’s only a matter of time until this price burden is shifted to the consumer, not only at the pump but across a multitude of areas of our daily lives.
Bradstock reports for Oilprice.com.
MoniePoint Inc. a digital financial firm in Nigeria, has said it is empowering community pharmacists across the country with innovative payment solutions to improve access to drugs.
The financial firm said it had also provided loans for pharmacists under the aegis of the Association of Community Pharmacists of Nigeria (ACPN) to drive healthcare delivery in the country.
MoniePoint in a release titled, “Inside Nigeria’s community pharmacies: How Moniepoint drives healthcare access with payments and funding”, has reaffirmed its commitment to providing digital payment solutions to improve health outcomes in Nigeria.
The release examined how community pharmacies play a crucial role as vital access points for medical care in Nigeria, especially in areas with limited hospital or clinic access.
According to the release, the ACPN National Chairman, Ambrose Igwekwam, highlighted the critical role played by community pharmacies in Nigeria’s healthcare system over the years.
Igwekwam, however, expressed concerns over the challenges confronting the nation’s pharmaceutical industry which he said was hindering access to affordable medicines.
The pharmacist listed poor infrastructural systems, power, transportation, regulatory bottlenecks, importation dependency, and limited research opportunities as major challenges facing the pharmaceutical sector.
He also stressed the need for robust collaborative efforts with institutions like Moniepoint to strengthen the sector.
“As Nigeria continues to grow, improving local pharma manufacturing to meet the demands of this growth presents a key opportunity for us all.
“There is also the African Continental Free Trade Area Agreement, which is expected to boost our industry, especially when we start producing our drugs locally, which will provide the much needed foreign exchange from exports.
“We are also seeing advancements in digital health and technology which would hopefully deepen the practice of e-prescription in Nigeria”, the ACPN boss said.
Corlins Walter
In order to enhance customer service and streamline operations, the Chartered Insurance Institute of Nigeria (CIIN) has called on stakeholders in the insurance industry to embrace Artificial Intelligence (AI).
The President of the institute, Yetunde Ilori, made this call at the 2024 Office Representatives Committee (ORC) Workshop, organised by the institute, with the theme “AI and the Future of the Insurance Industry”, in Lagos.
Ilori at the event, emphasised the importance of AI adoption, noting that it was not a threat to jobs but rather a tool to improve efficiency across the insurance sector.
“It is not about AI taking over our jobs, but about us using AI to simplify processes and give maximum satisfaction to all the customers we serve whether as underwriters, brokers, loss adjusters, or in educating our members”, she said.
The workshop, which brought players in the insurance sector together, aimed to address how AI could be leveraged to transform business processes and improve customer interactions.
The Chairman of the ORC, Monica Nwachukwu, underscored the role of AI in modernising the industry, adding, “AI can automate customer and claims processes, allowing insurers to provide faster and more efficient services to their customers”.
She explained how AI could help extract data from legacy systems, enhancing decision-making processes.
“By integrating AI with APIs, insurers can feed valuable data into AI solutions to improve operations and customer service”, she added.
In his address, the Managing Partner of A4S and Training Heights, Orlando Odejide, stressed the need for companies to align their strategies with future technologies like AI, especially as they prepare for 2025.
“Any organisation that wants to grow into the future must have its strategic plan in place. If your strategy for 2025 is not ready, it should be done by October”, he advised.
He encouraged participants to think critically about how AI could be integrated into their business models to ensure they remain competitive.
“The idea is for you to use this workshop as a platform to think about your organization and how AI can help streamline your processes and improve growth”, Odejide noted.
In order to gain global respect and recognition, the National Space Research and Development Agency (NASRDA) has reaffirmed its determination to pursue its goal in ensuring that Nigeria’s space capabilities are recognised on the world stage.
The agency also reaffirmed its commitment to positioning Nigeria as a key player in the global space economy.
In a statement by the Director of Media and Corporate Communications, Dr. Felix Ale, NASRDA revealed that the Director-General of the agency, Matthew Adepoju, emphasised this during recent engagements at the 79th United Nations General Assembly and the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and Global Alliance Business Association international conference in Michigan, United States.
The statement noted that Adepoju outlined a forward-thinking agenda, stressing the importance of Nigeria’s space programme as a leader in research, exploration, and technological innovation.
“Our goal is to ensure that Nigeria’s space capabilities are recognised on the world stage.
“We must foster collaborations with global space agencies to enhance our satellite capabilities and technological infrastructure”, he stated.
The NASRDA boss said the agency is focusing on enhancing satellite capabilities, expanding international collaborations, and leveraging space science for national development.
He said NASRDA will have no stone unturned in pursuit of excellence, ensuring the agency secures the necessary resources and recognition to propel it forward.
“The relationships we build today will pave the way for tomorrow’s advancements in space science.
“Innovation and progress thrive in an environment built on collaboration and inclusivity”, he stated.
He emphasised that with the support of the government, international partners, and a dedicated team, NASRDA is poised to make significant strides in the evolving global space landscape.
“We are on the brink of a new era for Nigeria’s space agency. Together, we will ensure our nation stands out in the global space economy”, he said.
Corlins Walter
