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Sunday, December 4, 2022

Russian-Ukrainian conflicts affect Nigeria’s economy

The conflict between Russia and Ukraine is now in its third week, when Russian President Vladimir Putin authorized the invasion of his soldiers into Ukraine, resulting in a full-fledged war as Ukraine continues to defend its land against the Russian invaders.  

The dispute between the two nations has resulted in Western economies imposing sanctions on Russia, stopping trade deals, and isolating the economy in various ways. Russia, on the other hand, remains a prominent player in many areas of the global economy.   

Russia world’s second largest crude oil exporter

Russia is the world’s second-largest crude oil exporter, making its oil supply a key influence of crude-oil price direction. The country is also one of the world’s leading producers of natural gas and renewable energy.  

The Russian Federation, for example, exports a substantial amount of fossil fuels to the European Union and is the top exporter of oil, natural gas, and hard coal. However, following the conflict, most Western economies have abandoned commercial agreements with Russia.  

Nigeria is not immune from the effects of the war, despite its distance from the conflict zone, due to Russia’s dominance in the global economy and Nigeria’s reliance on international trade and imports. As a result, it is critical to emphasize how the ongoing conflict is wreaking havoc on Nigeria’s economy.  

Crude oil prices have surged to new highs in recent weeks and have increased even more following Russia’s invasion of Ukraine, with Brent trading at $100 per barrel and Bonny Light around $110.   

The rise in diesel prices has become a huge concern for companies in the nation since their running costs would rise as a result of the fact that most enterprises rely on generators.  

Similarly, Nigeria is now experiencing a fuel shortage as a result of contaminated gasoline being discovered and removed off the market. These situations are expected to intensify in the following weeks, as vessels hauling petroleum goods into the nation may have difficulty bringing them in.  

As the cost of petroleum products rises, the cost of transportation has risen as well in most parts of Nigeria.   

Following the optimistic trend in the worldwide market, which has driven jet-fuel prices upward in recent weeks. The country’s aviation operators have been obliged to restrict their flying frequency.  

In February, airlines increased tickets by at least 100%, with a one-way economy ticket costing more than N50,000.   

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