https://en.sputniknews.africa/20231014/israel-palestine-burkinabe-minister-explains-how-spike-in-oil-prices-affects-africa-1062770333.html
Israel-Palestine: Burkinabe Minister Explains How Spike in Oil Prices Affects Africa
Israel-Palestine: Burkinabe Minister Explains How Spike in Oil Prices Affects Africa
Sputnik Africa
Following the sudden aggravation of the Israeli-Palestinian conflict, on October 9, London-traded Brent and New York-traded West Texas Intermediate crude... 14.10.2023, Sputnik Africa
2023-10-14T13:09+0200
2023-10-14T13:09+0200
2023-10-14T13:09+0200
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The economic consequences of the Israeli-Palestinian conflict "will affect the entire population [of the African continent] in one way or another," Burkinabe Minister of Energy, Mines and Quarries Simon-Pierre Boussim told Sputnik Africa during his visit to Russia on the occasion of the Russian Energy Week.According to the minister, primarily, it concerns the feared negative effects in the event of an increase in oil prices. Boussim noted that the energy sector of Burkina Faso which "uses a lot of hydrocarbons" in the production of electricity will be influenced most, adding that the share of thermal energy based on hydrocarbons is almost 80% of the country's energy sector.Moreover, the minister stressed that, as a result, "it will have an impact on the prices of electricity production."Boussim went on to say that ultimately, the increase in the hydrocarbons price risks affecting the population in Burkina Faso. He explained that the country's authorities support the social sector by subsidizing social electricity prices. In this context, the cost of raw materials will impact this subsidy, which will increase, the minister said. Then, the population will be asked to pay more to the state budget, according to Boussim.Impact on PopulationIn addition, the minister emphasized that the growth of the commodity prices following the increase in the cost of oil, risks worsening the living conditions of the population.The Israeli-Palestinian conflict escalated after the military wing of the Palestinian movement Hamas launched an offensive against Israel on October 7. Israel Defense Forces responded with massive shelling of the Gaza Strip. In Palestine, as a result of Israeli strikes, over 1,500 people were killed. Meanwhile, in Israel, the death toll has also reportedly reached more than 1,500.This sudden aggravation of the conflict is also fueling fears of disruption of oil supplies from the Middle East. With the start of hostilities, the price of black gold began to rise again.On October 12, Russian Energy Minister Nikolai Shulginov told the Rossiya 24 broadcaster that Russia's cooperation with Organization of the Petroleum Exporting Countries (OPEC) could allow Moscow to balance the oil market if the escalation leads to serious price shifts, adding that the impact of the conflict on global oil prices would depend on its duration and the severity of its consequences.
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Israel-Palestine: Burkinabe Minister Explains How Spike in Oil Prices Affects Africa
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Following the sudden aggravation of the Israeli-Palestinian conflict, on October 9, London-traded Brent and New York-traded West Texas Intermediate crude reportedly grew by 4.2% and 4.3% respectively amid fears that the fighting between Hamas and Israel could escalate into a broader regional conflict.
The economic consequences of the Israeli-Palestinian conflict "will affect the entire population [of the African continent] in one way or another,"
Burkinabe Minister of Energy, Mines and Quarries Simon-Pierre Boussim told
Sputnik Africa during his visit to Russia on the occasion of the
Russian Energy Week.
According to the minister, primarily, it concerns the feared negative effects in the event of an increase in oil prices. Boussim noted that the
energy sector of Burkina Faso which "uses a lot of hydrocarbons" in the production of electricity will be influenced most, adding that the share of thermal energy based on hydrocarbons is almost 80% of the country's energy sector.
"The consequences of any increase in hydrocarbon prices are harmful for our countries. We therefore have a usable capacity in thermal energy which represents 78% of our production. And so, once conflicts or exogenous factors affect the price of hydrocarbons, [it] systematically affects us who use a lot of hydrocarbons [in the production of] thermal energy," he highlighted.
Moreover, the minister stressed that, as a result, "it will have an impact on the prices of electricity production."
Boussim went on to say that ultimately, the increase in the hydrocarbons price risks affecting the population in Burkina Faso. He explained that the country's authorities support the social sector by subsidizing social electricity prices. In this context, the cost of raw materials will impact this subsidy, which will
increase, the minister said. Then, the population will be asked to pay more to the state budget, according to Boussim.
"It [will be] only a transfer of responsibilities for us. Because when the share of the budget devoted to the subsidy of electricity naturally increases, it impacts the entire population. Because we will ask the population to contribute more to the state budget," he said.
In addition, the minister emphasized that the growth of the commodity prices following the increase in the cost of oil, risks worsening the living conditions of the population.
"It is an indirect effect that we can experience through the increase. Because as soon as the cost of hydrocarbons grows, it will affect the cost of transportation. So this will affect the transportation of goods and services, etc, which, in our opinion, affects the entire population in one way or another," he concluded.
The
Israeli-Palestinian conflict escalated after the military wing of the Palestinian movement Hamas launched an offensive against Israel on October 7. Israel Defense Forces responded with massive shelling of the Gaza Strip. In
Palestine, as a result of Israeli strikes, over 1,500 people were killed. Meanwhile, in
Israel, the death toll has also reportedly reached more than 1,500.
This sudden aggravation of the conflict is also fueling fears of disruption of oil supplies from the Middle East. With the start of hostilities, the price of black gold began to rise again.
On October 12, Russian Energy Minister Nikolai Shulginov told the Rossiya 24 broadcaster that Russia's cooperation with Organization of the Petroleum Exporting Countries (OPEC) could allow Moscow to balance the oil market if the escalation leads to serious price shifts, adding that the impact of the conflict on global oil prices would depend on its duration and the severity of its consequences.
