Igor Sechin: Europe faces a new reality - Europeans have become poorer

For the first time in decades, Europe is facing a new reality - Europeans have become poorer, stated Igor Sechin, Chief Executive Officer of Rosneft, while delivering a keynote speech at the Energy Panel of the 27th St. Petersburg International Economic Forum.

Sechin said that despite government subsidies, the household gas prices in Europe almost doubled between 2021 and 2023. High energy costs are forcing European households to reduce gas consumption by unprecedented volumes.

“As a result of the price shock, the gas demand in household and commercial sectors of Europe dropped by more than 20% in the past two years and continues its fall this year. As a result, for the first time in decades, Europe is facing a new reality - Europeans have become poorer”, stated the head of Rosneft.

Increased gas spendings had an impact on the revenues of such energy-intensive industries as steel making, fertilizers, chemicals, ceramics and glass. “As a result, the manufacturing activity in the Eurozone has been on the decline since the middle of 2022”, the head of Rosneft said.

In effect, Europe is meeting its emissions reduction targets by directly cutting energy consumption and slowing down the economic growth. “The continuation of such policy may eventually destroy the European industry. As we all know, the lowest energy consumption is in the graveyard”, he added.

The Rosneft head noted that Europe lags behind the United States in economic growth and average per capita income. According to the International Monetary Fund, the European Union economy has grown by only 13% in US dollar terms over the past 15 years, whereas the growth of US economy has been 85% over the same period. At that, the average per capita income in EU countries has fallen vis a vis most of the US states, and now it is 52% lower than the US average, Sechin said. “If this trend carries on, then already by 2035 the gap in GDP per capita between the US and the EU will be five-fold, meaning that it will be as between Japan and Ecuador today”, he summed up.

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Rosneft
June 8, 2024