While soaring oil prices hit consumers worldwide, their misfortune means a fortune for others.
There will certainly be a “significant boost in government revenue” for some oil-producing African countries as oil prices hit their highest levels since 2008 after the U.S bans imports of Russian oil, the African Energy Chamber tells VOA.
“Nigeria, Angola, Libya, South Sudan, Gabon, the Congo and Ghana are going to see a significant boost in government revenue,” said Verner Ayukegba, senior vice president at Johannesburg-based African Energy Chamber.
However, he said, despite the economic breather for these African economies, most of the countries on the continent are heavily dependent on imports of refined products and will see their expenditures balloon.
“Countries like South Africa who are not producers but major economies who import crude oil to be able to refine for their industries, countries are going to see an increase in their import bills,” he said.
Skyrocketing crude oil prices and the rising cost of living on the continent also threaten to increase inflation, says Bala Zakka, a petroleum engineer based in Lagos, Nigeria.
“In Nigeria today, diesel has been deregulated. A liter of diesel goes for 450 Nigerian Naira ($1.08), and this is where you will appreciate the pains that Nigerians are going through,” Zakka said.
The oil analyst was unhappy that Africa’s most populous nation of 200 million people relies on imported refined products despite having the capacity to locally refine oil for domestic use like gas, diesel and kerosene.
Nigeria is the main oil producer in Africa and the largest crude oil exporter on the continent.
According to data from Statista, in 2020, Nigeria led the exports of crude oil from Africa. Overall, those exports amounted to about 5.4 million barrels per day in that year.
Meanwhile, the African Energy Chamber’s Ayukegba said that because of the uptick in oil prices globally, most African nations are likely to see more exploration for new oil and gas sources.
“Exploration spend is going to lead to much more oil and gas activities off the coast of Africa. The Gulf of Guinea for instance, and also in onshore locations,” he told VOA.
”There’s drilling going on in places like Namibia at the moment, where Total and Shell have come up with significant discoveries,” he added.