Increases In International Oil Prices Research Articles

Direct vs. Indirect Impact of Fuel Price on Wages in South Africa

The international oil price has been increasing significantly, but consumers react more to the announcement of the increase in fuel (pump) price, than an increase in international oil prices. This study, therefore, investigates the direct effect of fuel prices on the inflation rate and wages in South Africa, on the one hand, and the domestic price pass-through from fuel prices to wages (indirect effect) on the other. The impulse-response function of the vector autoregressive (VAR) technique was used to examine the direct and indirect effects of fuel prices on the inflation rate and wages, as well as the domestic prices pass-through from fuel prices to wages in South Africa. Quarterly data from 2001Q1 to 2018Q2 were utilised. The empirical results showed that inflation and wages responded positively to the shock in the fuel price. The results indicated that although wages increased because of a shock in the inflation rate—depicting the pass-through from the fuel price—the direct impact of the fuel price on wages is more significant. This study departs from the usual studies that examine the exchange rate pass-through of international oil prices to the inflation rate. The conclusion drawn was that the pass-through effect was not as strong and did not contribute as much as the direct effect of the fuel price. Therefore, the indirect shock of fuel prices, via inflation, does not so much cause an increase in wages as its direct shock. The study concludes with policy recommendations.

Assessing the Performance of the Niger Delta Development Commission (NDDC) 2001-2020: Another Failed Dream

The Niger Delta region of Nigeria is of critical importance to the country because of its oil revenues. Noteworthy, it is also strategic to the international community because of its significant contribution to world supply of oil; such that any shortage of oil supply from the region invariably causes increases in international oil prices. From the 1970s to date oil revenues derived from the Niger Delta region have been used to develop other parts of Nigeria, while the region has been left underdeveloped. This contradiction led to protests by the people of the region, which led to the establishment of the Oil Minerals Producing Areas Development Commission (OMPADEC) in 1992. The dream of OMPADEC was the transformation of the Niger Delta region from the state of poverty and underdevelopment to a prosperous society equipped with modern facilities and infrastructure. However, that dream failed due to several factors, including corruption and poor project execution. This disappointment generated intensified protests by the people of the region, leading to the establishment of the Niger Delta Development Commission (NDDC) in 2000 with the same mandate as OMPADEC. Many scholars have suggested that the NDDC has failed. This article assesses this suggestion and concludes that the NDDC is another failed dream. To succeed, appropriate recommendations are made towards reformation of the Commission for effective performance.

Bank Financial Stability, Bank Valuation and International Oil Prices: Evidence From Listed Russian Public Banks

Using data on 17 listed public banks from Russia over the period 2008 to 2016, we analyze whether international oil prices affect the bank stability in an oil-dependent country. We posit that a decrease in international oil prices has a negative long-run macroeconomic impact for an oil-exporting country, which further deteriorates the bank financial stability. More specifically, a decrease in international oil prices leads for an oil-exporting country as Russia to a currency depreciation and to a deterioration of the fiscal stance. In addition, given the positive correlation of oil and stock prices documented by numerous previous studies, a decrease in international oil prices represents a negative signal for the stock markets investors, negatively affecting banks' share prices and thus, their capacity to generate sustainable earnings. In this context, the bank financial stability can be menaced. With a focus on public listed banks and using a Pool Mean Group (PMG) estimator, we show that an increase in international oil prices and in the price to book value ratio has a long-run positive effect on Russian public banks stability, and conversely. While positive oil-price shocks contribute to bank stability in the long run, an opposite effect is recorded for negative shocks. However, no significant impact is documented in the short run. Our findings are robust to different bank stability specifications, different samples and control variables.

Impacts of exchange rate volatility and international oil price shock on China's regional economy: A dynamic CGE analysis

A multi-regional dynamic computable general equilibrium model is constructed in this paper to explore the macroeconomic effects of international oil price shocks and RMB exchange rate changes on China. The results show that (1) in terms of regional development differences, the decrease in international oil prices and depreciation of RMB are both conducive to economic growth, although the impact of RMB devaluation is more obvious. Increases in international oil prices will further widen the output gap between the rich and the poor regions, whereas oil price decreases and RMB devaluation will narrow the regional development differences. (2) In terms of employment, the depreciation of the exchange rate and the decline in international oil prices will help increase the employment rate in most regions, but oil price hikes will be most beneficial for improving oil industry employment in the northeast. (3) The impact of oil price volatility is asymmetric. Compared with rising oil prices, falling oil prices have significantly greater effects on GDP, industrial output, employment and other aspects. Furthermore, the impacts of exchange rate fluctuations and oil price changes on the regional economy exhibit a time lag.

선체 해양생물의 선저오염이 엔진성능과 출력에 미치는 영향

The cost of fuel in ships has recently increased due to a rapid increase in international oil prices and international restrictions regarding the greenhouse effect generated from the burning of fuel. Therefore, different methods for changing the hull designs for improving energy efficiency, developing coating for reducing friction resistances, developing additives for improving engine thermal efficiency, and low-speed operation for reducing fuel consumption have been considered. The developments of high-speed, large-scale, and energy-saving vessels are deemed essential to adapt to the recent high oil price era. Therefore, it is important to analyze Precisely the qualitative and quantitative changes in the resistance value of the local areas of the hull surface. In this study, the engine performance before and after docking was analyzed to examine friction resistance caused by marine growth on the hull as a basic study for improving the energy efficiency. The result was then presented by comparing it with the previous data for 2.5 years between docks to investigate the performance of the main engine, the change in friction resistances and loads, the fuel consumption and ship speed.

승용차용 다중모드 동력 전달 시스템의 정상상태 성능분석

Because of the increases in international oil prices and the level of global warming, the automotive industry has much interest in developing green cars with high fuel efficiencies. In addition, researchers in Korea are actively responding to high oil prices and emission regulations in many ways. One example is, the multi-mode hybrid system, which is being studied to improve its performance. Because a multi-mode hybrid system is able to overcome the weaknesses of a system that uses simple planetary gears, excellent fuel efficiency and driving performances are the key features of the system. This paper analyzes the driving performance of the power-train system of GM-2MT70, which consists of one engine, two electric motors, one simple planetary gear, one double planetary gear, two clutches, and two brakes. The driving performance of the system`s steady state is analyzed using performance modeling. The dynamic performance is analyzed using Matlab Simulink.

Determination of an economical shipping route considering the effects of sea state for lower fuel consumption

With increases in international oil prices, the proportion of fuel cost to the operational costs of a ship is currently increasing. To reduce fuel cost, a method for determining an economical route for a ship based on the acquisition of the sea state and the estimation of fuel consumption is proposed. The proposed method consists of three items. The first item is to acquire the sea state information in real time. The second item is to estimate the fuel consumption of a ship according to the sea state. The last item is to find an economical route for minimal fuel consumption based on the previous two items. To evaluate the applicability of the proposed method, it was applied to routing problems in various ocean areas. The result shows that the proposed method can yield economical ship routes that minimize fuel consumption. The results of this study can contribute to energy savings for environmentally friendly ships.

The poverty implications of high oil prices in South Africa

AbstractAn energy-focused macro-micro approach is used to assess the poverty implications of government policy response to increases in international oil prices in South Africa. The first scenario assumes that increases in international oil prices are passed on to end users with no changes in government policy instruments. In this scenario, poverty indicators increase. The second scenario assumes that the world price increases are nullified by a price subsidy by the government. This scenario still leads to an increase in poverty as the beneficial price effect is cancelled out by a decline in households’ income induced by the financing method used. While revenue generated from a 50 per cent tax on windfall profit of the petroleum industry helps to minimize the loss in government revenue, it does not contribute to mitigating the increasing poverty trend, since the decline in saving and investment under this scenario restricts the country's growth, employment and income distribution perspectives.

조업성능 향상을 위한 선망선 개선

In an attempt to respond to the increase in international oil prices and reduce operating expenses, ship remodeling was carried out on a 740ton class tuna purse seiner. To strengthen the competitiveness of the fisheries industry by improving vessel performance, a bulbous bow was newly equipped. The slipway and rudder area were also lengthened and enlarged with the propeller and main engine remained unchanged. To reduce the hull resistance, a circle type bulbous bow was attached on the hull behind bow thruster and thus the cost for exchanging electrical equipment for bow thruster was reduced. The new rudder area was expanded 15% more than the old one within the extent that the existing mechanical control part and rudder stock were not changed. To prevent fishing net damage and stabilize wake field, slipway was lengthened to the optimal position. All of the new design of remodeling parts went through the model tests in towing tank and CWC. Besides resistance test, all of necessary model test results were delivered for hydrodynamic character for the modified ship. The maneuvering simulation to verify that the remodeled ship satisfies the IMO rules was performed in both zigzag and turning tests. The estimated resistance with new bulbous bow and lengthened stern was reduced by 4.8% in the 2-dimensional analysis and 17.4% in the 3-dimensional analysis in comparison of conventional ship. The average reduction of resistance was estimated about 10%. Maneuvering character of modified hull form was found to satisfy all regulations under IMO. The remodeling of tuna purse seiner can not only improve fishing performance but also contribute to reduction of operating cost by saving energy for the fisheries industry.

Dynamic impacts of high oil prices on the bioethanol and feedstock markets

This study investigates the impacts of high international oil prices on the bioethanol and corn markets in the US. Between 2007 and 2008, the prices of major grain crops had increased sharply, reflecting the rise in international oil prices. These dual price shocks had caused substantial harm to the global economy. Employing a structural vector auto-regression model (SVAR), we analyze how increases in international oil prices could impact the prices of and demand for corn, which is used as a major bioethanol feedstock in the US. The results indicate that an increase in the oil price would increase bioethanol demand for corn and corn prices in the short run and that corn prices would stabilize in the long run as corn exports and feedstock demand for corn decline. Consequently, policies supporting biofuels should encourage the use of bioethanol co-products for feed and the development of marginal land to mitigate increases in the feedstock price.

Energy Security and Chile: Policy Options for Sustainable Growth

In the past several years, energy security has become a primary concern for Chile, a developing economy with minimal conventional hydrocarbon resources and expanding energy needs. In 2006, 70% of Chile's domestic primary energy consumption came from foreign sources and more than 30% of electricity generated in Chile depends on unstable natural gas supplies from Argentina. Since 2004, Argentine gas exports to Chile have fluctuated between 20-50 percent below contracted volumes. To make matters worse, with dramatic increases in international oil prices, replacing gas-fired electricity with diesel has been rather costly for Chile. Through a focus on Chile's electricity needs, this policy paper examines diverse approaches to addressing Chile's energy crisis and separates them into three sets of policy responses. After careful analysis, this study recommends that Chile 1) continue with policies that facilitate the growth of renewable, alternative energy technologies, 2) begin to implement medium-sized nuclear power plants, 3) increase funding for its new national energy efficiency program, and, finally, 4) continue its commitment to import LNG from Asian countries through terminals constructed on Chile's Pacific coast.

Impact of higher oil prices on the Chinese economy

AbstractThe demand for oil in China has dramatically increased in the last years. Today, China is the second largest consumer of oil in the world behind the United States. This growing demand in oil comes in a context of steep international price hikes for oil. With its increasing oil consumption, China today plays a major role on the international oil markets, and a change in its consumption could seriously destabilise these markets. Moreover, today China occupies a preponderant place on the international scene, and a large drop in its economic activity could significantly affect world growth. It, therefore, is important for us to ask what the impact of the current increase in oil prices on the Chinese economy might be. The aim of this article is to conduct a quantitative analysis on the potential impact of the rise in oil prices on the Chinese economy. The macroeconomic and sectoral effects are evaluated with the help of a computable general equilibrium (CGE) model. Two scenarios were formulated: the first assuming a US $10 increase in international oil prices; the second, a $25 increase.

Promoting regional energy co-operation in South Asia

Energy is a key ingredient of the socio-economic development of any region. South Asia is not only one of the fastest growing regions in the world; it is also one of the poorest, which thus puts energy at the very heart of the development process in the region. This paper looks at the challenges faced by the South Asia sub-region for economic co-operation (SASEC) comprised of Bangladesh, Bhutan, India and Nepal, and also at the role of greater regional energy co-operation therein. The region is characterized by pressures of growing economies and increasing population. While the per capita energy consumption is one of the lowest in the world, energy intensity continues to be very high. A large portion of the population lacks access to modern sources of energy and depends on traditional sources that are not only inefficient but also have severe health and environmental problems associated with them. Increasing oil import dependency and huge investment needs for energy market development pose a further challenge. The region has a good resource potential and tremendous scope for energy co-operation, which can play a key role in addressing many of these energy security concerns and in putting it on the path of sustainable development. It is ironic that the record in the area has been so limited and that too in the most basic form of co-operation, i.e. bilateral arrangements between countries. This paper puts forth a multi-pronged strategy for sub-regional energy co-operation encompassing softer options aimed at confidence building to more substantial and larger scale co-operation efforts. Delays in decision making to ensure stronger and mutually beneficial co-operation efforts are associated with high costs not only to the energy sector but also for the entire development agenda. With the precarious energy situation in the region and unprecedented increases in international oil prices seen in recent times, it is high time for policy makers, financing institutions, NGOs and the civil society to push for a greater integration of the SASEC energy sector.

Energy planning in developing countries

The sharp increases in international oil prices during the past decade have had a major impact on growth prospects and balance of payments in developing countries. This has led to an increasing awareness that energy is a crucial factor in the development process. This paper describes the planning context in developing countries and summarizes their needs. Within an overall analytical framework for analysis and planning, a number of specific approaches and examples are given in the areas of energy demand and supply planning. One of the major conclusions is that the energy planning process can be effective only as an integral part of development planning.