Oil Shortage Looms

The News (Lagos) February 7, 2000

Lagos - The country is currently witnessing a heated debate on whether or not to deregulate the oil sector. To deregulate the oil sector will mean an increase in the prices of petroleum products, especially the Premium Motor Spirit, popularly called petrol.

This, according to labour leaders, will translate to a harsher life for the masses. On the other hand, the supporters of the proposed deregulation, the petroleum sector, will help curb the activities of petrol smugglers who divert the product to sell at higher rates in other countries.

But these arguments will pale into insignificance when it is considered there may be shortage of crude oil. According to reports, the global demand for oil is not matching up with its supply. This, in simple economics, will translate to a hike in price. The Associated Press (AP) reports that at the end of last year, the demand for oil increased much faster than its supply. This is attributes to the much- trumpeted Y2K hoax which made people hoard crude oil. A monthly report by the International Energy Agency (IEA), reveals that world demand for oil swelled to "an extremely strong" 77.3 million barrels per day in the fourth quarter of 1999 exceeding available stockpiles by 3.1 million barrels daily. The IEA has also forecast that the world demand for oil will grow by an average of 1.8 million barrels per day in 2000.

But analysts say there may not be outright danger yet. Peter Gignout of Citibank says he doesn't think "we're near a crisis stage," although he was also quick to agree with the thrust of the IEA report, which, to him, is simply saying "watch out, this market is getting short of oil."

Already, prices for the benchmark oils of Europe and the United States rose by more than four per cent in December and surged further last week. The West Texas is flirting with $30 a barrel, a level not achieved since the outbreak of the Gulf War in January, 1991. The IEA, a part of the Organisation of Economic Cooperation and Development, a group of the world's richest countries, also attributes the upward pressure on oil prices to signs that OPEC (Organisation of Petroleum Exporting Countries) will extend its production cuts in output beyond March when its members will meet

Like A Friend

All is yet to be well with Nigeria. Not a few citizens agree that the country's nascent democracy, after decades of military rule, is still tottering. But like a friend (many hope), the United States of America is offering a tripod stand.

If a recent announcement by the Clinton administration is anything to go by, then Nigeria (and three other countries) may be on its way to achieving stability and development in all spheres.

Bill Clinton, according to the US Secretary of State, Madeleine Albright, has singled out four countries-Colombia, Nigeria, Indonesia and Ukraine-for special attention and aid. Delivering a speech on democracy, Albright said each of the aforementioned countries can be a major force for stability and progress in its region "and each is at a critical point along the democratic path."

Albright did not mention the amount of lifeline that will be thrown to these countries except for Colombia which she announced will be getting $1.6 billion.

But as it is, Nigeria may be getting more than $12.5 million which is what she got last year. The country is already requesting for $20 million this year. US aid to Nigeria has been rising steadily in an effort to help Nigerians deal with threats to their fledgling democratic experiment.

Colombia, Indonesia and Ukraine on the other hand are receiving the US aid to help them eradicate corruption and violence while stabilizing their economies and establishing the rule of law.

http://www.africanews.org/west/nigeria/stories/20000207/20000207_feat5.html

-- Martin Thompson (mthom1927@aol.com), February 07, 2000