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(a) Increase in the prices of many commodities as a result of increase in the cost of production and transportation where oil is used to provide power and as a raw material in some industries.
(b) Increase in the prices of imports due to high crude oil prices which affect the balance of trade by causing earnings from exports to be lower than the cost of imports.
(c) High rates of inflation or devaluation of currency as a result of commodity prices rising high due to the cost of imports being passed to the consumers.
(d) Industries are forced to lay off workers because of the high cost of production which can cause losses.
(e) It causes the price of other forms of energy e.g. charcoal and gas also to become expensive.
(f) Developing countries running into heavy dept as a result of borrowing heavily to pay for oil loans which are paid at high interest rates making the country unable to invest in development projects.
(g) Decrease in agricultural production as a result of decrease in the use of agricultural inputs such as fertilizers due to their high cost brought about by increase in oil prices.
(h) Decline in the number of tourists as a result of escalation of oil fares making it very expensive to travel.
(i) Environmental degradation as a result of environmental degradation brought about by the high demand for charcoal and firewood which leads to soil erosion and low rainfall amounts.
marto answered the question on March 28, 2019 at 09:45
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