Even though COVID 19 outbreak has dented almost every industrial sector around the world in the past few months, the Oil and gas energy sector has been most severely hit. Right when the crude oil prices were going southwards, the outbreak has almost dampened the demand for oil and gas energy across various aspects of life.
NJ Ayuk, the co-founder of the famous centurion law group, further talks about the ill-effects of the covid19 outbreak on the Oil and gas energy sectors. He further refers to the recent report released by the IEA Oil market that talks about the huge drop in the demand of oil and gas around various parts of the globe. That said, let’s take a look at the major elements in regards to the same study.
Impact on the electricity sector
NJ Ayuk guardian, who himself played a key role in transforming the African oil and energy sectors in the recent times, also points towards the overall impact of this dropping demand on the electricity sector. He points out the big down surge witnessed by Europe in the electricity rates in the same context.
There have been certain European countries, where electricity prices have gone negative. Although these figures were evident on weekends or holidays in these zones, even weekdays are not an exception anymore. Hence, it can be said that the drop in demand can drastically impact the electricity sector in the post-COVID 19 eras.
Delayed construction of energy establishments
While almost every sector has ceased its operations in recent times due to COVID 19 outbreak, the energy sector is no exception. This is where most of the non-critical energy establishments have been suspended or delayed in the wake of complete lockdown across various countries.
NJ Ayuk further says that renewable energy markets have experienced the biggest hit as there is a big drop in the supply of raw materials and inventories to help the functioning of such establishments. For example, China is the biggest producer and manufacturer of clean energy solutions like Solar panels, batteries and wind turbines.
Now, as there is a ban on international flights and other export/import, the establishment are non-functional due to the lack of all such equipment and solutions.
Delayed payments for energy consumption
NJ Ayuk also points towards the guidelines issues by the energy suppliers to their consumers in regards to the delay in p[ayment of the energy bills during the lockdown period. This widespread tolerance of non-payment or delayed payment is drastically impacting the functioning and operational of these energy sectors.