By Vijay Jayaraj – March 30, 2022
Approximately 1.3 billion Indians have been informed that the price of cooking gas will increase by 65 cents per litre. In a country like India, higher fuel prices can have rapid and dangerous repercussions, resulting in increased morbidity and mortality.
The situation is similar in other developing countries and in the poor economies of the African continent. Unfortunately, the mainstream media is underreporting how hostility to fossil fuels has contributed to the current energy crisis.
The populations of developing countries have been poorly served by leaders who waste precious resources on “green energy” infrastructure when they could easily have used those funds to improve the production and import of coal, oil and natural gas.
Consider India and Vietnam, two fast-growing Asian economies that have been undone by the “green” distraction that has squandered their domestic energy security in the name of climate awakening.
Despite accelerating coal production, India finds itself in an energy mess thanks to billions of dollars invested in underperforming renewable energy technologies. Between 2014 and 2019, the Indian renewable energy industry received $64.4 billion in investment.
Instead, the country could have directed money to reliable and affordable coal power plants that would have cost only a fraction of the “green” waste. In 2016, India’s investment in renewable energy was equivalent to the construction costs of 11 coal-fired power plants. Also, several small-scale oil refineries may have been commissioned and put into operation in the last 10 years, reducing the need to import refined fuel at higher prices.
Many argue that a country like India is already using too much fossil fuel. But this argument fails when the nation raises fuel prices for those who can least afford it. There are 230 million people in India who earn less than $5 a day. For these people and millions of middle-class households, rising fuel prices mean rising costs for basic goods and transportation and a general stagnation of economic development.
Another fast-growing Asian economy is Vietnam, where leaders seem committed to increasing the share of “green” technologies in the energy market. This ignores the problems created by the country’s move away from fossil fuels.
During the past few weeks of volatile oil prices, analysts have lamented Vietnam’s missed opportunity to strengthen its domestic oil and gas infrastructure. Since February, gas retailers have faced severe shortages, with more than 300 gas and oil retailers across the country halting sales.
Situations like these could have been minimized had the country not been apathetic about energy security. A key reason for the high gas prices is declining output at the Nghi Son oil refinery, which did not receive enough government support to avoid financial difficulties and a 90 percent drop in output in January. The refinery serves 35 to 40 percent of the national gasoline market.
Economist Dinh Trong Thinh says, “When the plant’s output is unstable or has a problem, it will affect the Vietnamese oil market because the Nghi Son refinery’s market share is large. The risk of a factory closing is an important issue for the oil sector in particular and the economy in general, which urgently needs the intervention of the State management bodies”.
However, this urgency is not reflected in the government’s actions to withhold an environmental tax that raises fuel prices and continue to invest in renewable energy projects that do nothing to improve energy security.
It is time for developing economies to stop experimenting with proven failures like wind and solar power and start developing infrastructure that can address international price volatility.
Vijay Jayaraj is a contributing writer for the CO2 Coalition and has a master’s degree in environmental science from the University of East Anglia, England. He resides in Bangalore, India.
This commentary was first published on March 30, 2022 on the westernjournal.com website.