INTRODUCTION
Oil is an important product throughout the world that affects many sectors of the economy. Many countries both the developed and developing countries in one way or another depend on oil. The transport sector mostly uses oil though some states have come up with automobiles that user electricity and other alternative sources of energy (Olah et al., 2011). There are very many areas of the economy that use oil for different reasons like fueling vehicles, generation of electricity cooking among many other functions. The price of petroleum is predominantly an issue that many countries grapple with since it affects their output and the costs of the various industries in the respective countries. Their recent fall in oil prices has prompted an over purchase of the commodity. The fall in price has benefited many people and companies, which use the oil in their daily operations. Car owners have benefited greatly as the demand is greater than supply because of the fall in prices.
The oil prices will are still predicted to fall, even though, the commodity supply in future is not ensured. The issue of overspending on oil and using it extravagantly should not cross the minds of the people. The people mainly government throughout the world should focus on other energies apart from oil that can substitute oil and, therefore, reduce the dependence on oil. Whole dependency on oil is not healthy for the global economy. Countries could use more oil that they need to use and end up polluting the atmosphere. The pollution can be through the releases of more greenhouse gasses in the atmosphere and, therefore, increase global warming that has adverse impacts on the economies throughout the world. Lack of rainfall and increased sea levels to name a few may devastate various economies by the loss of lives and livelihoods. Countries should, therefore, brighten their prospects of finding other alternative sources of energy like the sun and wind and using them to offset any oil deficiencies that may arise in future.
The article points to the fact that countries will develop an addiction to oil as a cheap commodity due to the fall in prices (Jung & Park, 2011). The fall in prices of oil affects the Middle East countries negatively since they have been selling oil at a higher price before that at present. The economies mostly depend on oil since other sectors cannot work well for example agriculture. The Middle East countries have few sectors that they can depend upon to boost their economies and, as a result, the countries, which have oil, depend wholly on it. The countries use the proceeds from the oil to shop around for substitute the various sectors of the economy. Therefore, much of their revenues are affected by oil prices, and their spending power is correspondingly affected. When the price of oil has dipped as it is now they are affected negatively and it in some instances it could to unemployment where people lose livelihoods due to lack of money to sustain certain sectors in the country (Tang et al., 2010).
The overspending and the resultant increased use of oil affect climate change. Air pollution and carbon emissions can lead to market failure if not taxed. Therefore need to be careful to prevent market failure by adopting strategies that will help them prevent the over usage and dependence on oil. Countries, as a result, should focus on using sustainable and alternative sources of energy to prevent the condition that will bring down the market and affect the world economy globally. Oil is a valuable commodity used in many sectors as mentioned above and any change in price will significantly affect the areas especially when the prices are increased.
To help matters, countries should thus focus on alternative energy and ensure that they do not wholly depend on oil. Such a move will help countries to maintain the use of petroleum to a minimum. The countries, therefore, need to use what they need and not overspend on what they do not need. Taxing air pollution and tax will help in controlling and checking the use of oil globally and ensure that climate change is monitored through various measures that reduce undue utilization of petroleum.
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