The world’s richest man and founder of electronic car company, Tesla, has called for increased western hydrocarbon investments in oil and gas to make up for reliance on Russian oil and gas exports.

Elon Musk disclosed this in a tweet on Saturday morning.

This comes as several sanctions imposed on Russia have also not been applied towards the sector.

Hate to say it, but we need to increase oil & gas output immediately.

Extraordinary times demand extraordinary measures.

— Elon Musk (@elonmusk) March 5, 2022

Musk tweeted, “Hate to say it, but we need to increase oil & gas output immediately. Extraordinary times demand extraordinary measures.”

He added that increased investments in oil and gas would obviously negatively affect Tesla, “but sustainable energy solutions simply cannot react instantaneously to make up for Russian oil & gas exports.” 

Obviously, this would negatively affect Tesla, but sustainable energy solutions simply cannot react instantaneously to make up for Russian oil & gas exports.

— Elon Musk (@elonmusk) March 5, 2022

Since Russia’s invasion of Ukraine, many countries have imposed severe sanctions on Russia. Even though the sanctions targeted banks, oligarchs, and other financial institutions, countries, it has barely affected Russia’s energy sector.

Minutes after the call to increase oil production, Musk tweeted again showing solidarity with the people of Ukraine.

“Hold strong Ukraine,” Musk tweeted. “And also my sympathies to the great people of Russia, who do not want this.”

The price of Automotive Gas Oil, popularly known as diesel, is currently sold at N545 in some fuel stations across Lagos. This is an increase of over 113% from the N225 which the commodity was for sold in January 2021.

This was confirmed from findings made by Nairametrics on Saturday across fuel stations in some areas in Lagos.

The findings revealed that while some stations along Lagos-Ibadan expressway are selling at N545/litre, others in Abuja sell between N440 and N460/litre.

Some of the fuel stations visited by Nairametrics were Mobil, along the Lagos-Ibadan Expressway (N545), and Northwest Petroleum, along the Oshodi-Apapa road (N550), Heyden filling station, along Third Axial Road, Ogudu.

The price of diesel, which is not regulated by the government, has surged by over 113% in the last 14 months, as the further rise in global crude oil prices and naira depreciation pushed up the cost of importing fuel into the country.

Diesel is mostly used by businesses, especially manufacturers, to power their generators amid a lack of reliable power supply from the national grid. Many vehicles transporting goods and people across the country also use diesel.

What they are saying about surge

The National Operations Controller, Independent Petroleum Marketers Association of Nigeria, Mr Mike Osatuyi, said in a recent media briefing that the recent increase in oil prices had led to further hikes in diesel prices in Nigeria.

He said, “If crude oil prices continue to rise, diesel price will also go up. This is coupled with the depreciation of the naira. Naira is around 570-575 to a dollar at the parallel market.”

The Director-General, Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture, Ayo Olukanni, explained recently in a media report that the private sector had already raised alarm on the increasing difficulties in obtaining the required foreign exchange for raw materials for industry, adding that the high cost of obtaining forex was reflected in the high cost of goods and inflationary trend.

He said, “Perhaps most embarrassing is the energy crisis, with our low generation and distribution problems; we can only boast of combined install generation capacity for of about 12,000MW, distribution of just 4000MW and abysmal 114kwh per capita for a population of over 200 million and running our industries on generators.”

Four indigenous oil and gas firms have indicated interest through the submission of bids for the acquisition of Shell Petroleum Development Company (SPDC)’s multibillion-dollar stake in a joint venture that operates oil fields.

This is as Shell is still pushing ahead with its earlier plans to divest from its Nigerian assets especially its shallow water and onshore interests.

According to several sources with knowledge of the negotiations who wished to remain anonymous, Seplat Energy Plc, Sahara Group Ltd., Heirs Oil and Gas Limited and ND Western Limited submitted the non-binding offers in January.

Bloomberg in its report said that its sources revealed that the sales of Shell’s 30% operating interest could generate as much as $4 billion, although it was noted that the oil major is yet to disclose to buyers the scale of potential future costs related to litigation or decommissioning and abandoning oil wells, which could bring down the sale price significantly.

It can be recalled that in August 2021, energy consultant Wood Mackenzie Limited, had valued Shell’s stake in its joint venture at $2.3 billion, assuming a long-term oil price of $50 a barrel. Brent crude, the international benchmark, is currently trading just below $90.

One of the sources said that Shell is currently deliberating and evaluating the non-binding bids to find out which of the oil firms to move to the next round. However, no final agreements have been reached as Shell could still decide to retain the asset.