The Oil Price Hike In the Lens of Economic Globalization

Posted on Posted in Uncategorized

By: Mary Martha Manaligod

As March 2022 went by, oil prices rose in the Philippines thanks to the constricted supply of oil imports creating inconveniences for Filipinos, specifically for the transportation sector. The pricing per liter increased at PHP 13.15 for diesel, PHP 7.10 for gasoline, and PHP 10.50 for kerosene (de Vera, Ocampo, Subingsubing, & Salaverria 2022). This phenomenon did not only affect the country, but the rest of the world as well with market rebounds and oil prices upped at 8% (Rappler, 2022). Yet, the bigger question remains: Why are we all affected?

The answer is simple but powerful: economic sanctions amidst economic globalization. Looking back at February 24, 2022, the Russian invasion of Ukraine commenced, leading to imposed economic sanctions in an attempt to hinder the war (Crismundo, 2022) including the United States’ ban on all Russian gas and oil imports (BBC, 2022). Though these were applicable to Russia, the globe is not immune to the consequences such as the aforementioned oil price hike due to the long-time connection of nations. Dubbed as “economic globalization”, it is significant to understand this concept seeing as the Philippines itself experiences it at such a dire time.

Economic Globalization refers to the interdependence of numerous economies on a global scale which stems from the increased flow of trade of commodities, services, technology, and information (Shangquan, 2000). This ongoing expansion and consensual integration of markets becomes impossible to stop given the gaps between developed and developing countries. On a positive note, this means that there are more opportunities to improve economies through employment and access to more goods and services. The other side, however, expresses how economic globalization becomes the reason for income disparity and poverty (Kilic, 2015).

Inevitably, any change in the global market has a wide-scale impact, which brings us back to the economic sanctions brought about by the Russian-Ukrainian war. Economic Globalization, therefore, paves the way for a chain reaction with the oil price hike as just the beginning (Baluyot, 2022). Though this directly influences the transportation sector, it also results in higher prices for goods and services due to transportation costs. Whatever area you may reside in, economic globalization is bound to reach you.

So, what can we do as students? To mitigate the consequences, the echo to call for our own national and local governments is necessary for them to properly intervene and provide alternative resources for the public, more particularly for the transportation sector. What we can do to adjust on our own, however, comes with having a set contingency fund to make up for higher prices in purchasing necessities. Finally, it is important to support local as these small businesses too are impacted.

SOURCES:

Baluyot, J. (2022, March 8). Oil price hike is just the beginning: The domino effects of Russia-Ukraine conflict. Yahoo News. Retrieved from https://ph.news.yahoo.com/oil-price-hike-is-just-the-beginning-the-domino-effects-of-russia-ukraine-conflict-philippines-031930149.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAHZlD-eAZ5GgsTKQlsBpdTT9xUdzwKVsl1VQVy7fi7YWwng_VoqMHcc-gls6detGsqtNNoEfPgUgpyn519wQDfDLFvJqmYa9LxYoBbGwpfBJCRAZAXLW0UCPPao5gmXN1_bjqCdaOnTpbmtWzh8P-UsqIJc1dQ39wHQme4IMXpaW.

BBC News. (2022, March 25). What sanctions are being imposed on Russia over Ukraine invasion?. BBC News. Retrieved from https://www.bbc.com/news/world-europe-60125659.

Crismundo, K. (2022, March 7). ‘Real’ big-time oil price hike set March 8. Philippine News Agency. Retrieved from https://www.pna.gov.ph/articles/1169175.

de Vera, B., Ocampo, K., Subingsubing, K., & Salaverria, L. (2022, March 15). Oil firms set biggest increase in fuel prices. Inquirer. Retrieved from https://newsinfo.inquirer.net/1568337/oil-firms-set-biggest-increase-in-pump-prices.

Kilic, C. (2015). Effects of Globalization on Economic Growth: Panel Data Analysis for Developing Countries. Economic Insights – Trends and Challenges, IV(1).

Rappler. (2022, March 18). Wall Street stocks, oil prices rise after aggressive Fed hike outlook. Rappler. Retrieved from https://www.rappler.com/business/updates-global-stock-markets-oil-prices-march-17-2022/.

Shangquan, G. (2000). Economic Globalization: Trends, Risks and Risk Prevention. Economic & Social Affairs. Retrieved from https://www.un.org/en/development/desa/policy/cdp/cdp_background_papers/bp2000_1.pdf.

Leave a Reply

Your email address will not be published.