The Russian-Ukraine war has continued to take toll on global business, with the United States economy technically plunging into recession after the Gross Domestic Product contracted in the second quarter of the year.
According to data published by the US Bureau of Economic Analysis yesterday, the GDP growth rate dropped by 0.9 per cent year-on-year.
This is coming at a time the US, Canada and United Kingdom are experiencing increase in petrol price due to the global energy crisis caused by Russia’s invasion of Ukraine and its direct impact on the Brent crude oil price.
Other European countries, such as Luxembourg, Germany, Austria, and Belgium among others, including some countries in Africa, such as South Africa and Uganda are also experiencing the impact of the energy crisis.
Investigations revealed that in United States, the average price of a litre of petrol hit $1.218 on Thursday, an equivalent of N864.78 per litre. In Canada, price of petrol is about CAD 1. 89 per litre (N882).
Energy prices have also soared in the UK as a litre of petrol now sells for £1.86 which translates into about N1,488 per litre when converted into the Naira. In Luxembourg, petrol sold for £1.73 per litres which when translated into the Nigerian currency represents about N1,384 per litre.
Economists have warned of further increases in energy prices throughout the year, which will affect consumers already dealing with rising food, electricity and transportation costs.
Member countries of the Organisation of Petroleum Exporting Countries (OPEC) are also experiencing high energy prices with pump price of petrol selling for N406 in Qatar, N443.8 in Ecuador, N970.2 per litre in Equatorial Guinea, N655.2 per litre in Gabon and N359.8 per litre in Iraq.
Experts say the trend is driven by both economic and geopolitical factors, revealingthat when energy supply is scarce with mounting demand high, prices rise.
In Nigeria, marketers have made slight adjustments in prices, with some selling at N169, N175, N200 per litre, depending on location.
Government sources said the retention of the pump price of N165 per litre, far below the landing cost of petrol, is a bid to cushion the negative impact of global energy crisis on the cost of living on Nigerians.
Between January and April, the federal government, through the Nigerian National Petroleum Company Ltd, incurred N210.38bn, N219.78bn, N245.77bn and N271.58bn respectively for payment of fuel subsidy respectively.
President Muhammadu Buhari had recently approved an increase in the estimated provision for petrol subsidy for 2022 by N442.72bn from N3.557trn to N4trn.
The World Bank had last month estimated that the increase in global price of crude oil will push the fuel subsidy budget of the federal government from the current N4trn to about N5trn by the end of this year. It is believed that the disruption in supply chain may have contributed negatively to the United States economy in the first quarter of the year, as GDP growth rate dropped by 1.6 per cent.