Explain the three effects of over-dependence of petroleum on the economy of oil importing countries.

Explain the  three effects of over-dependence of petroleum on the economy of oil importing countries.   (6 marks)

• Higher expenditure/foreign exchange/ spends more on importation
• Higher production costs/hence higher prices of manufactured goods
• Closure of industries which are not able to meet the increased cost of production coupled with increase in transport cost
• Slowed industrial growth as most industries depend on petroleum
• Economic recession in these countries as oil is necessary for all sectors of production

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