Nigerias’ big oil markets switching to electric vehicles

Electric vehicle sales have been growing exponentially, and several countries are showing it’s possible to scale up EV sales fast enough to meet climate goals. Netherlands, one of them is a major buyer of Nigerian crude, a development that puts a clock on the resource.

The rise in electric vehicle adoption does not bode for oil producers especially Nigeria which is unable to exploit fully its crude oil resources at a time when energy think tanks are placing the commodity’s all-time high demand period as early as the next seven years.

International trade data from the Nigerian Bureau of Statistics (NBS) indicate that Nigeria’s oil are chiefly sold to countries in Europe like the Netherlands, Italy, Spain, and Asian countries like China.

Read also FG sets target on production of electric vehicles in Nigeria

According to NBS data, the value of total exports from Nigeria in the second quarter of 2021 stood at ₦7,015.71 billion of which more than 90 percent was mineral products – oil and gas commodities.

The challenge for Nigeria is that as it struggles to lift oil production, it could find that its market is fast receding. Worse still, time is running out for oil.

According to Fatih Birol, executive director of the International Energy Agency, demand for fossil fuels like oil, gas, and coal will hit an all-time high before 2030.

The sea change in energy demand is due to, among other reasons, the growth of clean energy technologies like solar panels and electric vehicles, and current global governmental policies, Birol said.

“Based only on today’s policy settings by governments worldwide — even without any new climate policies — demand for each of the three fossil fuels is set to hit a peak in the coming years. This is the first time that a peak in demand is visible for each fuel this decade — earlier than many people anticipated,” Birol said.

Globally, ten percent of passenger vehicles sold in 2022 were all-electric, according to analysis of data from the International Energy Agency. This is ten times more than it was just five years earlier.

The top five countries with the highest share of EV sales are: Norway (all-electric vehicles made up 80 percent of passenger vehicle sales in 2022), Iceland (41 percent), Sweden (32 percent), the Netherlands (24 percent), and China (22 percent), according to an analysis by the World Resources Institute (WRI), an energy sector resources.

Read also Electric vehicle sales decline as governments cut subsidies, tax credits – study

Analysts at WRI said China’s place on this list is especially significant considering it is the biggest car market in the world. The other two biggest car markets have lower EV sales but are growing quickly: the European Union (12 percent) and the United States (6 percent).

Electric Vehicles (EVs) produce fewer greenhouse gas emissions than internal combustion engine vehicles, such as gasoline- and diesel-powered vehicles. Once the electric grid shifts to zero-carbon power, emissions will be even lower. This is why ramping up EVs is seen as one of the most important steps in reducing transportation emissions — alongside reducing private vehicle travel and shifting to public transit, biking or walking.