Higher Global Prices for Oil and Gas due to Russia’s War in Kyiv has Filled Algeria’s Coffers

Europe’s attempts to wean itself off Russian gas have given Algeria a shot in the arm. Flush with energy revenues after Russia’s invasion of Ukraine sent demand for its oil and gas soaring, authorities are spending more on social benefits and taking a more assertive stance abroad, pivoting from years of declining wealth and the political upheaval of a mass protest movement. President Abdulmadjid Tebboune has announced expected increases to public sector wages, pensions and unemployment payments, returning to a model of generous social spending to which Algerians have long been accustomed. Algerian supplies account for more than a quarter of gas demand in each of Spain and Italy and Sonatrach is the third-biggest exporter to Europe after Russia and Norway. Sonatrach has said oil and gas earnings this year will reach $50bn, compared to $34bn in 2021 and $20bn in 2020, while official figures forecast non-oil exports to top $7bn — a record. Rules to encourage foreign involvement in Algeria’s energy sector have helped increase investment and develop new projects. Yet despite the additional diplomatic sway it has gained from higher energy demand, Algeria’s focus is likely to stay on maximising revenue from increased prices to soothe a population that had started growing restive.

SOURCE: BUSINESS DAY LIVE