Global surge in oil prices hits economies in Africa

The global surge in oil prices as a result of the U.S.-Israeli war on Iran has continued to impact economies, incomes and the cost of living across Africa, sparking protests and strikes in several countries.

In Kenya, the rising fuel price is becoming one of the biggest daily challenges for residents. A transport strike in May brought parts of Kenya's capital, Nairobi, and other towns across the country, to a standstill. Thousands of commuters were forced to walk to work.

In South Africa, petrol and diesel prices have neared a four-year high.

In Uganda's capital Kampala, the impact is being felt in every link of the supply and distribution chains.

"If we are not getting the trucks at the right time for exports and imports, we can't do any business, because we depend on the transporters for imports and for exports also, and the transporter depends on the fuel prices, so they are already increasing the charges," said Sarun Sunny, an executive of the logistic company Phenix Freighters.

Even oil-producing countries aren't benefiting. In Nigeria, experts say rising crude prices are not translating into stronger currency reserves.

"Our oil operations, upstream oil exports, it's a JV - it's a joint venture. So, it's not everything that we export that belongs to us. It's almost 50-50," said Muda Yusuf, a Nigerian economist.

Multiple African governments have introduced measures to address the crisis. Ethiopia has increased fuel subsidies. South Africa has extended fuel levy relief.

In Namibia, the government plans to temporarily reduce fuel levies by 50 percent until the end of June.

Nigeria's Dangote refinery, the largest in Africa, has increased exports of gasoline and the widely used chemical urea to African countries hit by supply disruptions caused by the war.

Egypt, on the other hand, has suspended the early-closure policies that were initially implemented in March to curb energy consumption.

Senegal and Cote d'Ivoire have used fiscal funds to cap fuel and essential goods prices.

As governments come under more and more pressure to provide a softer cushion to the crisis, businesses warn of tougher times ahead if the measures don't work.

Global surge in oil prices hits economies in Africa

Global surge in oil prices hits economies in Africa

The average price of regular gasoline across the United States has risen back above 4 U.S. dollars per gallon, according to the latest data released by the American Automobile Association (AAA) on Monday.

The current price marks a sharp increase from 3.14 U.S. dollars per gallon during the same period of last year, representing a year-on-year surge of over 27 percent.

Driven by factors including the ongoing military conflict between the United States and Iran, the national average price for regular gasoline breached the 4 U.S. dollars-per-gallon threshold at the end of March, reaching a nearly four-year high before continuing to climb.

After the two countries signed a memorandum of understanding in mid-June, prices fell back below 4 U.S. dollars per gallon and trended downward for a period. However, as the military confrontation between the two countries has escalated over the recent weeks, fuel costs have once again surged.

In addition, the escalation of the U.S.-Iran conflict has coincided with Russia's implementation of a diesel export ban, pushing the national average price of diesel back toward 5 U.S. dollars per gallon.

Industry insiders in the American freight sector have pointed out that rising diesel prices will directly increase transportation costs, which will be reflected in freight quotes and package surcharges, ultimately passing through to retail prices and further fueling inflation in the United States.

Analysts predict that the longer the Strait of Hormuz remains blocked, the greater the impact on the global economy, and oil prices may continue to climb.

As the November congressional midterm elections approach, elevated fuel costs are already placing political pressure on President Donald Trump and the Republican Party. A recent poll released by American media showed that approximately 67 percent of respondents expect the U.S. economy to deteriorate further over the coming year.

US oil prices climb back above 4 US dollars per gallon amid its continued conflict with Iran