Growth, commodities inflation, and births deflation

* BusinessWorld October 31, 2022.
---------

....

COMMODITIES INFLATION

This column has discussed comparative inflation rates in many countries before — see for instance “The ERC, NGCP, inflation and public debt” (Oct. 10). Today we will discuss important commodities and their price hikes over the past two years. I use the latest data, that of Oct. 28, and compare the prices on the same date in 2021 and 2020.

The irrational “war on fossil fuels” has produced irrational and unwanted results: high energy prices, from gasoline and diesel to electricity; high fertilizer prices, like that of ammonium nitrate because the main raw materials to produce ammonia and urea are natgas and oil; high industrial prices for items like bitumen, asphalt, and paints because their main raw material is crude oil; high agricultural prices because of high fertilizer prices, and high livestock prices because feeds — from corn, soybeans, etc. — have high prices.

The big jump in energy prices started in 2021, even before the Ukraine war. See the column on year-on-year (Yoy) 1% changes, much higher than Yoy2% changes (Table 2).

It is wrong, it is dishonest, to keep blaming the Ukraine war for the high inflation experienced in many countries around the world. Three factors produce the current high inflation situation. One, the war on fossil fuels. Two, the economic sanctions against energy and industrial exports of Russia by countries which have no territorial dispute with Russia in the first place. And, three, the huge money printing, public spending, and borrowings....

Comments

Post a Comment

Popular posts from this blog

Declining inflation and Germany’s energiewende

Image
Declining inflation and Germany’s energiewende June 8, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/06/08/527389/declining-inflation-and-germanys-energiewende/ ... ERRATUM I would like to apologize to the readers for the error in transposition in headings in Table 1 of my column last week, “NGCP, low power generation, and the Maharlika Fund” (June 1). The table’s column on Population should have been for Power generation and vice versa. Sorry for that mistake and the confusion it created. Nonetheless, the column and computed kWh/person remains valid and correct. Also, the numbers on average growth in power generation and GDP remain valid and correct. Meanwhile, here are some points about the National Grid Corp. of the Philippines (NGCP) that I did not include in my column last week. One, the Energy Regulatory Commission (ERC) in previous administrations had issued a lot of show cause orders with penalties to private distributio
Read more

Another round of high FiT due to expensive wind-solar power

Image
* My article in  BusinessWorld  last January 24, 2017. Cheaper electricity and stable energy supply are among the important components to have fast and sustainable economic growth. On Jan. 17, the Philippine Electricity Market Corp. (PEMC) sent a press release saying that “effective settlement spot prices (ESSPs) in the wholesale electricity spot market (WESM) plunged to P2.28/kWH for the December 2016 billing period which is the lowest since January 2011. ESSPs refer to the average prices paid by wholesale customers for energy purchased from the spot market.” That is good news as various players using fossil fuel sources like coal, natural gas, and oil, are fiercely competing with each other in generating electricity. WESM was created by EPIRA of 2001. On the same day, the Department of Energy (DoE) posted a “Request for comments on the draft Department Circular entitled ‘Declaring the launch of WESM in Mindanao’ (on Jan. 26, 2016) and providing for transition arrangements.” Another g
Read more

Energy realism: Raising consumption and economic growth

Image
Energy realism: Raising consumption and economic growth June 29, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/06/29/531213/energy-realism-raising-consumption-and-economic-growth/ (Part 1) This column will produce a series of articles on energy realism, not alarmism, to support sustained economic growth for developing countries, especially the Philippines. New global data are now available from the Energy Institute (EI), which launched the Statistical Review of World Energy 2023 on June 26. The report has been published by British Petroleum since the 1960s until 2022. We start with consumption of primary energy — commercially traded fuels, fossil and nuclear, plus modern renewables for electricity generation. I compare GDP per capita at purchasing power parity values at constant prices, and primary energy consumption in gigajoule (GJ) per capita. One GJ is equivalent to 277.8 kWh in electricity, or 0.16 barrel of oil. I grouped
Read more