How will rising fuel prices affect different parts of the world?

Reports of higher energy costs are causing concern around the world as pressure increases on businesses and people to purchase goods and services.

The biggest shortage, reports the Associated Press, is the lack of natural gas in Europe. European countries import 90 percent of their supply. Much of it comes from Russia. European prices have increased fivefold since the start of the year.

Experts blame several events for the gas shortage. They say demand increased after restrictions on coronaviruses were lifted. They say the cold winter past has reduced reservations. And the summer was less windy than usual, so less wind power was generated.

Europe’s main supplier, Russian Gazprom, has withheld additional gas supplies over the summer to source from Russia. On top of that, China’s electricity demand has returned after the COVID-19 pandemic. China has purchased limited amounts of liquid natural gas, which is transported by ship, not by pipeline. There are also a limited number of plants exporting natural gas from the United States.

Europe pushes renewable energies

It’s hard to say how much higher fossil fuels the prices will last, said Claudia Kemfert. She is an energy expert at the German Institute for Economic Research in Berlin.

“The long-term answer that needs to be taken out of this is to invest in renewables and energy conservation,” she said. Renewable energy comes from the wind and the sun.

The European Union’s executive board recently urged member countries to speed up approvals for renewable energy projects. The group said that “clean energy … is the best Assurance against price shocks in the future.

However, some European gas-dependent industries are reducing their production of products. German chemical companies BASF and SKW Piesteritz reduced their production of ammonia, an important part of fertilizers.

This caused a problem for Hermann Greif, a farmer from the German region of southern Bavaria. He said he couldn’t buy fertilizer for his crops.

“There is no product, no price, not even a contract,” he said. “It’s a situation we’ve never seen before. He said the situation could lead to a lower harvest in the coming year.

High energy prices are already hitting German farmers, who need diesel fuel to run their machines and keep animals warm, Greif said. He grows corn to make biofuel, or fuel made from crops.

Higher heating costs?

Northerners around the world are expected to face higher heating costs this winter. That includes the United States, where officials have warned home heating prices could rise by up to 54%.

FILE – In this file photo from April 11, 2011, workers at German energy company RWE prepare power for a high-power pylon in Moers, Germany. The world is facing an energy crisis. (AP Photo)

The governments of Spain, France, Italy and Greece have announced measures to help low-income households. The European Union has asked for similar help.

It depends a lot on the weather. Europe’s gas reserves are generally replenished during the summer. But now they’re at unusually low levels.

“A cold winter in Europe and Asia would risk dropping European storage levels to zero,” explains Massimo Di Odoardo. He works for the research firm Wood Mackenzie.

This would leave Europe dependent on more natural gas from a new Russian pipeline or on Russia sending more gas via pipelines to Ukraine. The new Nord Stream 2 gas pipeline under the Baltic Sea has not been approved in Europe. It might not start operations until next year.

Kemfert in Berlin said that the decision of Russian suppliers to sell less gas on the free market shows that they want to “put pressure on the start. certificate by Nord Stream 2.

Power shortages hurt businesses and people

In China, power cuts followed rising coal and gas prices. Power companies in some parts of the country are restricting electricity. Factories in southeastern Jiangsu and Zhejiang province were temporarily closed in mid-September. This could affect export suppliers.

Chenchen Jewelry Factory is located in Dongyang, a city in Zhejiang. The factory faced power outages for 10 days, said general manager Joanna Lan. The factory manufactures headbands, paper products and gifts. Eighty to 90 percent of its products are exported to the United States, Europe and other markets. Orders were delayed “for at least a week,” Lan said. “We had to buy generators. “

The largest city in the northeast, Shenyang, turned off street lights and elevators and cut off electricity to restaurants and stores for a few hours a day.

Jenny Yang is an energy market expert at IHS Markit. She said China’s gas imports have jumped. However, growing demand in Japan, South Korea and Taiwan has also helped push up prices around the world.

In Brazil, rising gas and oil prices are a problem because lack of rain has made hydroelectric dams less productive. This made electricity more expensive.

Rosa Benta is a 67 year old woman from Sao Paulo. She fears that she will no longer be able to provide for her unemployed family members.

“Several times (energy company) Enel called me to tell me I was in debt. I told them, ‘I’m not going to stop feeding my son to pay you,’ ”Benta said. “If they want to cut off the electricity, they can come.

I am Mario Ritter, Jr.

And I am Jill Robbins.

The Associated Press reported this story. Mario Ritter Jr. adapted it for VOA Learning English. Susan Shand was the editor.


Words in this story

reservations -not. a supply of something that is stored so that it can be used at a later date

fossil fuels –N. (Pl.) fuels (coal, oil, natural gas) that form in the Earth from dead plant and animal matter

Assurance -not. protection against bad things that may happen in the future

certificate ­-not. official approval to do something legally

Generator -not. a machine that produces electricity

elevator -not. a machine used to transport people and things to different levels in a building

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