Tony Elumelu Foundation (TEF), on Friday announced plan to host 1,300 African entrepreneurs, business leaders and policymakers from 54 countries in Lagos. Mrs Parminder Obe, the TEF’s Chief Executive Officer, who made this known at a briefing in Lagos, said the 3rd Annual TEF Entrepreneurship Forum has been slated for October 13. She said the…
By Isaac Anumihe
Few days after National Bureau of Statistics announced Nigeria’s exit from recession, there is growing anxiety that the country may soon slip back into another major economic crisis with the China’s move to ban the production and sale of diesel and petrol vehicles.
China is Nigeria’s largest crude importer since the USA slashed its purchases from the country over two years. The development is coming two months after the UK, Germany, France, India, Norway and Netherlands, revealed plans to ban fuel-run cars, as part of efforts to reduce air pollution.
The ban will lead to a reduction in demand for oil in China, which is currently the world’s second-largest oil consumer after the US.
In place of oil dependent cars, China plans to introduce into the auto market electric battery cars and plug-in hybrids to account for at least one-fifth of its vehicle sales by 2025.
The self-drive electric vehicles (EVs) are 10 times cheaper to run than fossil-based cars, with a near-zero marginal cost of fuel and an expected lifespan of 1 million miles (1.6 million kilometres). Only nostalgics will cling to the old habit of car ownership. It will become harder to find a petrol station, spares, or anybody to fix the 2000 moving parts that bedevil the internal combustion engine. Dealers will disappear by 2024. Cities will ban human drivers once the data confirms how dangerous they can be behind a wheel. This will spread to suburbs, and then beyond. There will be a “mass stranding of existing vehicles”. The value of second-hard cars will plunge. You will have to pay to dispose of your old vehicle. It is a twin “death spiral” for big oil and big autos, with ugly implications for some big companies on the London Stock Exchange unless they adapt in time. The long-term price of crude will fall to $US25 a barrel. Most forms of shale and deep-water drilling will no longer be viable. Assets will be stranded. Scotland will forfeit any North Sea bonanza. Russia, Saudi Arabia, Nigeria, and Venezuela will be in trouble. It is an existential threat to Ford, General Motors, and the German car industry. They will face a choice between manufacturing EVs in a brutal low-profit market, or reinventing themselves a self-drive service companies, variants of Uber and Lyft.
Analysing the implications on the impact of such a move on oil-dependent countries like Nigeria, a professor, Tony Seba, described it as disastrous, saying: “The long-term price of crude will fall to $US25 a barrel. Most forms of shale and deep-water drilling will no longer be viable. Assets will be stranded. Scotland will forfeit any North Sea bonanza. Russia, Saudi Arabia, Nigeria, and Venezuela will be in trouble.”he said.
The shift, according to Seba, is driven by technology, not climate policies. “Market forces are bringing it about with a speed and ferocity that governments could never hope to achieve. We are on the cusp of one of the fastest, deepest, most consequential disruptions of transportation in history” Seba said.
“Internal combustion engine vehicles will enter a vicious cycle of increasing costs.”