Energy sees higher demand in Arab countries

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Dubai city at night
Dubai city at night. Latest figures reflect that the annual growth rate of energy consumption in Arab countries has touched 5.2 percent. Photo-Daniel Cheong

Latest figures released by the Organization of Arab Petroleum Exporting Countries (OAPEC) show the annual growth rate of energy consumption in Arab countries at 5.2 percent.

Quoting from a monthly OAPEC energy information publication, the Kuwaiti News Agency reports that daily oil consumption in the Arab region climbed from 11.6 million barrels in 2009 to around 13.5 million barrels in 2012. Compared to 2011, Arab gas consumption rose marginally from 6.58 million (BOe) barrels equivalent to 6.75 million (BOe) barrels in 2012.

Higher energy consumption is driven by a population increase in some Arab countries and from major urban expansion projects. As a result, consumer habits in the region have undergone a paradigm shift along with the use of modern transport and communications. Further, subsidies provided by Arab governments on petroleum products have fueled energy use by limited-income and medium-income households.

The OAPEC members accounted for about 90 percent of the overall Arab energy consumption in 2012. These countries possess large oil and gas reserves and growing energy consumption levels are a result of rapid economic growth, changing demographics, and rapidly rising population. These countries make up around 65 percent of the total Arab population.

The rise in global oil consumption highlights the need for oil producing countries to invest in output and take other measures to meet the growing domestic demand for oil.

Arab oil producing countries will face some challenges as they try to reach a balance between domestic oil and gas consumption on the one hand — and oil and gas exports on the other hand.

Traditionally, several Arab states have remained dependent on income from oil and gas exports to support the economy and finance state spending on economic diversification projects and infrastructure development. If there is a drop in income from oil exports, Arab economies are likely to face far-reaching social and economic consequences, which may even fuel unrest as was manifested during the Arab Spring.

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