Crude refiners see growth in petrochemicals on electric car threat

The world petrol demand is believed to peak by 2030 largely due to the impact of electric cars and more efficient engines but this could force refiners to change their business model and rely more on petrochemicals for growth rather than petrol.

Wood Mackenzie in its latest report said there would be about 4.5million units of electric cars on the road displacing about 2 million barrels per day of crude oil output. It expects the take-up of electric vehicles to cut petrol demand significantly as the world mainstream battery-powered cars.

European countries have also initiated policies that will see outright ban on petrol and diesel vehicles

“This means that refiners will demand lower volumes of crudes and refining will shift to petrochemicals rather than for petrol,” Tony Ogbuigwe, managing director PEJAD Nigeria said at 18th edition of the Annual Petroleum Policy Roundtable, organised by Centre for Petroleum Information (CPI) held at Eko Hotels, Lagos on July 20.

Ogbuigwe in his presentation said that diesel will rise due to International Maritime Organisation standards but there will be a switch to marine diesel with lower sulphur content, demand for CNG, LPG will rise, more for vehicular purposes. Hence gasoline or petrol demand will fall.

The experts at the event said exploits been achieved in electric car manufacturing including reduction in charging time, investments in charging stations and more efficient engines that cover more distance on a single charge should make Nigeria who depend on crude oil to fund its budget jittery.

Ogbuigwe said petrochemicals will make more economic sense for investors rather than petrol and this should make Nigeria to begin to develop sustainable policies for the sector.

“We need to change what we are doing with our refineries to meet growing demand for fertilizers and others,” said Ogbuigwe.

The current industrial agriculture system is dependent upon petrochemicals and experts say this will continue to fuel demand. Fertilizers will remain a necessity if the current agricultural system is to be maintained and global demand for food.

Victor Eromosele who gave the keynote address warns that climate change is here despite denials and can be seen in rising temperatures, heavy rains leading to flooding and the shrinking .

“We are seeing parts of Nigeria with temperatures rising about 40 degrees, at least 80 people died in Katsina because of flood. The Lake Chad has shrunk by two-third, all these point to climate change impacts.

“The world around us is changing and the danger is that those of us in this part of the world who play ostrich, could be in a dangerous situation as time will pass quickly and others would move on,” Eromosele said.

ISAAC ANYAOGU