India’s plan to only sell electric cars by 2030 should have Nigeria worried

The decision of the Indian government to start selling only electric cars by 2030 has grave implications for Nigeria who currently supplies the Asian country 12 percent of its crude oil volumes.

India’s energy ministry in a blog post, (which has since been taken down after a CNN report on it) said that it has set the “ambitious” target to stop selling gas-powered vehicles in an attempt to clean up its air.

The country’s economy which has seen a boom in the form of new industries and mega projects is challenged by pollution that endangers the health of over 1.3billion citizens. This has begun to question the boom itself. One estimate says India’s air contributes to 1.2 million deaths per year and doctors have said breathing the air in New Dehli, the nation’s capital, is like smoking 10 cigarettes a day, according to a CNN report.

In a bid to cut down the pollution, the country is looking away from fossil fuels. India’s energy minister, Piyush Goyal, said recently that the country will help facilitate the electric car effort by offering subsidies for a couple of years. The country projects annual sales of electric and hybrid cars to hit 6 million to 7 million by 2020.

But this development could have grave implications for Nigeria’s revenue. According to data from the website of India’s Ministry of External Affairs, India imports around 12 per cent of its crude oil requirements from Nigeria. Petroleum imports from Africa’s largest economy accounted for $7.46 billion out of total imports of $7.65 billion in 2016 to 2017.

Despite Nigeria’s stated intention to diversify its economy from crude oil, the commodity still accounts for over 80 percent of the revenue. The oil sector employs less than 1 percent of the populace and while it is only now beginning to gain traction, the agricultural sector employs 50 times more. Yet more brain matter is dissipated on the oil sector at the expense of others.

A petroleum industry bill that is touted to tackle teething challenges in the oil sector has remained stuck in the national assembly due to disagreements over critical areas including how to deal with host communities issues and fiscal terms for the country. So not only is there a threat to revenue, Nigeria’s petroleum industry is still in need for deep reforms.

Worse still, oil revenues cannot remain high for long. India’s imports declined significantly by 23 per cent to $7.65 billion during 2016 to 2017 as against $9.94 billion earned between 2015 and 2016 due to the fall in crude oil prices in the international market.

ISAAC ANYAOGU