Nigeria’s crude oil export may be threatened as the number of countries gradually shifting from fossil fuels and encouraging the adoption of electric vehicles increase
According to the International Energy Agency, sales of electric cars topped 2.1 million globally in the year 2019, surpassing 2018 to boost the stock of 7.2 million electric cars, with China leading the charge.
The agency said nine countries had more than 100,000 electric cars on the road while at least 20 countries reached market shares above one per cent.
“In 2019, electric vehicles in operation globally avoided the consumption of almost 0.6 million barrels of oil products per day,” the IEA said.
Going by this development, the demand for crude oil is expected to continue to decline following the surging sales in electric vehicles in Asia and Europe.
A UK newspaper, The Guardian, reported earlier this month that carmakers have sold more than 500,000 battery electric cars in Europe during 2020, compared to only 354,000 sold during the whole of last year across the region,
It should be note that Europe is the biggest regional export market for Nigeria’s crude oil, followed by Asia.
Mr. Bala Zakka, an energy expert, stated on Monday that the shift towards the use of electric vehicles and renewable energy would have serious impact on Nigeria’s oil export revenues.
While admitting that it was a wrong thing for u to export raw materials without converting it into finished goods like other organized nations. He therefore wondered why Nigeria cannot convert its hydrocarbon endowment and start producing petrochemicals.
According to a new document released by the Central Bank of Nigeria, an economic expert, Prof. Obadan Mike, said at the last Monetary Policy Committee meeting that, “The implication of weak recovery for global demand for crude oil, upon which Nigeria depends for its fiscal and foreign exchange sustenance, are very grave.”
Obadan added that continuing weak oil market ‘compounds the challenges in Nigeria’s fiscal operations and is not helpful to the country’s external sector and macroeconomic stability objectives.
It would be recalled that the British Prime Minister, Boris Johnson, said in February that he was bringing forward a ban on the sale of new petrol and diesel cars from 2040 to 2035.
The United Kingdom had said last month that it would stop selling new diesel and petrol cars and vans from 2030. Other countries including France and Norway have also announced plans to ban new internal combustion engines over varying timeframes.