African Reserves

Kenya: Slow exit from Covid-19 threat paves way for darkness as energy crisis looms


Kenyans are furious at the repeated increases in fuel prices this year. The past month has caused an uproar as the wananchi were already suffering economic adversity due to the effects of the Covid-19 scourge.

Fuel prices are at record highs due to a tax increase approved by parliament. Gasoline prices currently stand at 129.72 shillings compared to 135 shillings last week per liter in Nairobi after the last adjustment on Thursday.

After suffering job losses, with many sectors, including tourism, being the hardest hit, Kenya’s gross domestic product fell last year for the first time in three decades. Combined with the uncertainty of the economy and the current jobs crisis, rising fuel prices are driving up production costs, food prices, transport and the cost of living as well as the cost of living. ‘inflation.

A similar problem arises across the world. During the year 2020, global economic activity has almost come to a standstill. There was a drop in international travel, factories were running under capacity, and demand for most products had shrunk, resulting in reduced manufacturing.

As a result, the overall demand for energy has decreased. The world’s major oil producers have cut back on production. After administering the Covid-19 vaccines, countries are mostly out of containment and air travel is slowly getting back on track. Suddenly, demand for energy has exploded while supply remains low.

Nonrenewable energy

The world runs on electricity and fuel. Heating, lighting, manufacturing, travel and transportation are all powered by primarily non-renewable energies, including coal, oil, and natural gas.

Unlike the situation in Kenya, where higher prices are attributed to increased taxes, the global scenario of higher prices is due to the currently strained energy supply. Manufacturing plants pay astronomical prices for coal to fuel their production.

From coal shortages in China and India to gas shortages in the UK, a global energy crisis is spilling over and affecting everyone as prices across the world have started to soar, resulting in high inflation.

In most of Europe, there is a natural gas crisis, inflation in the euro area is said to be at its highest for 13 years.

In China, factories are closing due to coal shortages. South America reports impending power outages due to power shortages. Has a rapid post-pandemic recovery led to this situation?

After the threat of Covid-19, this threat of an impending energy crisis could end up on empty shelves as far as the eye can see. In the UK, after a botched Brexit, the country faces a self-inflicted crisis, not because of a lack of fuel but because of a lack of drivers and British soldiers are driving tankers, delivering fuel to stations. empty service.

Europe’s gas reserves are also declining significantly as the continent faces the worst fuel crisis in modern history. China’s attempt to go green and drastically cut carbon emissions with immediate effect has led to a slowdown in mining while demand for coal has not diminished. Factories across China have started slowing production because there isn’t enough coal to power production lines, even though producers are importing coal at a much higher price than ever before.

Aluminum price

The price of natural gas and coal used for production has reached multi-year highs. More than 80 Chinese steel mills have indefinitely suspended production for maintenance due to the low availability of coal and their inability to carry out their operations.

In India, automaker Maruti has already raised prices three times this year. Aluminum prices will skyrocket to multi-year highs. Green energy supplies are unable to meet the energy demand of factories.

There has been a difficult transition to green energy. Was there a clear roadmap for climate action and the provision or investment in green energy? In the case of China, to meet climate goals, was it safe to cut off the coal supply and leave the nation in the dark?

Should a strategy have been put in place to cope with the expected strong economic recovery combined with the green transition? The move towards green energy has led many European countries to depend on North Sea wind farms.

Gas reserves

The wind in the North Sea has stopped blowing, the turbines are almost stationary, forcing regional energy markets to fight for gas reserves to heat homes during the winter and power industries. The Nordic region is experiencing an electricity shortage due to sagging water reservoirs affecting hydropower production, causing fuel prices in September 2021 to be five times higher than 12 years ago. month.

Europe could face power outages at the height of winter. Chinese industrial users, including chipmakers and aluminum smelters, could face plant closures with ripple effects spilling out across the globe. Savings that cannot afford fuel could easily stop.

So how does this affect us? Cars, electrical appliances, appliances, medicines, transport, everything will become more expensive.

All production will take place at a higher cost and manufacturers will be forced to raise prices which will then be passed on to consumers. Even though the world sees a glimmer of light through the Covid pandemic, darkness can fall as we run out of fuel.

The Writer is a Business and Financial Analyst, Humanitarian, Environmentalist, Occasional Artist, OGW Honor Recipient.


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