- Tanzania Considers Tax on Charcoal to Save Forests
Tanzania is considering putting a tax on charcoal with the aim of discouraging the use of the fuel, which is a big source of energy for cooking but also a major contributor to deforestation.
Officials say they believe making charcoal more expensive would significantly reduce demand for it and cut runaway tree felling in the east African nation.
Justus Ntalikwa, permanent secretary in the Ministry of Energy and Minerals, told the Thomson Reuters Foundation that the government hopes to present a bill in the next parliament in February to put in place the levy, with funds raised going to finance reforestation activities in district councils.
“The idea is to reduce destruction of forests,” Ntalikwa said. However, putting such a levy in place may be a complicated process because it involves a range of authorities, he said.
Under the government plan, anyone who sells charcoal within one of the country’s districts or exports charcoal from it would pay a tax of about 30,000 Tanzanian shillings (about $11) on each 90 kg bag of the fuel.
The proposed tax, which will be subject to parliamentary approval, would be payable at checkpoints set up in each district.
In Tanzania, more than 370,000 hectares (915,000 acres) of forests are being cut every year, a significant portion of it for fuel, according to Tanzania Forests Services Agency, a government agency responsible for monitoring the country’s forestry activities.
Jumanne Maghembe, the minister of Tourism and Natural Resources, said in December that cutting wood for charcoal needs to stop because it spurs desertification.
“I think if we impose a hefty levy on charcoal its price will go up remarkably and fewer people will be attracted to cut down trees to sell charcoal. By doing so we will be saving our forests,” he said.
According to Maghembe, if the government makes charcoal more expensive it would simultaneously promote the use of alternative fuels, including liquefied petroleum.
Crude Oil Pulled Back Despite Joe Biden Stimulus
Crude oil pulled back on Friday despite the $1.9 trillion stimulus package announced by U.S President-elect, Joe Biden.
Brent crude oil, against which Nigeria’s oil is priced, pulled back from $57.38 per barrel on Wednesday to $55.52 per barrel on Friday in spite of the huge stimulus package announced on Thursday.
On Thursday, OPEC, in its latest outlook for the year, said uncertainties remain high in 2021 with the number of COVID-19 new cases on the rise.
OPEC said, “Uncertainties remain high going forward with the main downside risks being issues related to COVID-19 containment measures and the impact of the pandemic on consumer behavior.”
“These will also include how many countries are adapting lockdown measures, and for how long. At the same time, quicker vaccination plans and a recovery in consumer confidence provide some upside optimism.”
Governments across Europe have announced tighter and longer coronavirus lockdowns, with vaccinations not expected to have a significant impact for the next few months.
“The complex remains in pause mode, a development that should not be surprising given the magnitude of the oil price gains that have been developing for some 2-1/2 months,” Jim Ritterbusch, president of Ritterbusch and Associates, said.
Still, OPEC left its crude oil projections unchanged for the year. The oil cartel expected global oil demand to increase by 5.9 million barrels per day year on year to an average of 95.9 million per day in 2020.
But also OPEC expects a recent rally and stimulus to boost U.S. Shale crude oil production in the year, a projection Investors King experts expect to hurt OPEC strategy in 2021.
OPEC Says Uncertainties Remain High in 2021
The Organization of the Petroleum Exporting Countries (OPEC) on Thursday said global uncertainties remained high going forward in 2021 but kept its oil demand forecast unchanged.
In the cartel’s latest oil outlook for 2021, oil demand is expected to increase by 5.9 million barrels per day year on year to 95.9 million barrels per day. The prediction was unchanged from December’s assessment.
However, OPEC and allies, said: “Uncertainties remain high going forward with the main downside risks being issues related to COVID-19 containment measures and the impact of the pandemic on consumer behavior.”
Crude oil rose to $57 per barrel this week after incoming US President Joe Biden announced it would inject $1.9 trillion stimulus into the world’s largest economy.
But the recent rally in the commodity and stimulus announcement is expected to boost US crude oil output and disrupt OPEC+ production cuts strategy for the year.
“The 2021 supply outlook is now slightly more optimistic for U.S. shale with oil prices increasing, and output is expected to recover more in the second half of 2021,” OPEC said.
Still, OPEC, in its forecast “assumes a healthy recovery in economic activities including industrial production, an improving labour market and higher vehicle sales than in 2020.”
“Accordingly, oil demand is anticipated to rise steadily this year supported primarily by transportation and industrial fuels,” the group said.
Brent Crude Oil Rose to $56.25 Per Barrel
Oil price surged following the declaration of Joe Biden as the President-elect of the United States of America last week after Trump’s mob invaded Capitol to disrupt a joint Senate session.
Also, the large drop in US crude inventories helped support crude oil price to over 11 months despite the second wave of COVID-19 crushing the world from Asia to Europe to America.
Brent crude oil, against which Nigerian Crude oil is priced, rose to $56.25 per barrel on Friday before pulling back to $55.422 per barrel on Monday during the London trading session.
Experts attributed the pullback to the rising number of COVID-19 cases in Asia with about 11 million people already locked down in Hebei province in China.
“Covid hot spots flaring again in Asia, with 11 million people (in) lockdowns in China Hebei province… along with a touch of FED policy uncertainty has triggered some profit taking out of the gates this morning,” Stephen Innes, chief global market strategist at Axi, said in a note on Monday.
China, the world’s largest importer of crude oil, has joined the United Kingdom and others declaring full or partial lockdown to curb the second wave of COVID-19.
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