"Britain to ban sale of all diesel and petrol cars and vans from 2040 ".
Fellow Nigerians,
"The house is on fire and the owners are running after rats"!
Let me help us understand the implication of what the UK is about to do. In 2011 Obama made a similar statement. When he said,
" We Will end our dependence on foreign oil".
At the time when he made this audacious statement, Nigeria was the 5th largest exporter of oil to the United States. And things looked good for us as a nation. A lot of us did not know that Obama was actually talking about us. We were so consumed with the opium of a cool, black African President, who will do us no harm. Three years later, the U.S stopped importing crude oil from us. And the result was devastating. They gave our oil a red card. And the red card gave our currency, the naira, a knockout punch, “one blow, seven die”. We went from N200 to a dollar to N500 to a dollar. The consequence of this was dare and severe, and everyone felt it. The prices of food and other commodities suddenly went through the roof. People began to struggle financially, hardship became common place, state governments couldn’t pay salaries and banks began to lay off innocent men and women. It is not as if we are even out of the wood yet, and now this.
So what happened? Why did the U.S stop buying our oil? The answer is shale oil. They discovered shale oil, developed the capacity to drill this liquid and therefore did not need our oil anymore. They replaced us with their own home grown oil. Shale oil disrupted us.
There is an African proverb that says, “When the mouse laughs at the cat, there is a hole nearby”. Ladies and gentlemen as I write this post, it might interest you to know that Tesla just unveiled a car called model 3. This car can run for 215 miles after charging it. It does not have plugs, no valves, no gasket to replace, no combustion engine and therefore no need for a mechanic to fix it. It is a technology car with softwares, artificial intelligence, applications, digital devices and auto pilot. Meaning that you can sit behind the wheel of the car and watch the car drive itself. And it does not pollute the environment. Remarkable!
This is the future that emboldened the UK, France and other countries to declare that they cannot carry on with diesel and petrol cars anymore.
And the winner is Elon Musk. He just disrupted the auto industry. He has succeeded in moving the entire buzz about the future of transportation from hype to reality and other auto industries are rushing to join. Volvo for instance just announced that by 2019 they will stop producing any kind of diesel/petrol cars. 2019 is two years from now.
Fellow Nigerians, the future is with us today and electric car is the future. Electric car has finally disrupted petrol cars; the same way that the computer disrupted the typewriter several years ago.
What this means for us as a country is that the demand for oil will start going down. In the next three years, some countries will join the UK in rejecting our oil because they will no longer need it. Demand for our oil will fall. And as demand falls, the price of oil will crash and as prices fall the value of our naira will crash to possibly N1000 to a dollar or N2000 to a dollar. I am not a futurist and I am not an economist but it was right before our very eyes that we saw our naira crash from N250 to a dollar to N500 to a dollar in less than one year. The only reason why our currency gained value thereafter was because OPEC came together to pull the plug over oil fields.
Each time I discuss this issue with friends, I usually get this question. Sam, do you mean that the oil industry will soon disappear? My answer is usually NO! Developing countries like Nigeria, Ghana, Venezuela, Trinidad and Tobago will remain with combustion engine cars far beyond 2040. As a matter of fact, most of the petrol and diesel cars currently plying the roads of the developed world today, would end up in Africa. So petrol cars will be with us for a while.
Another use for our oil is in the aviation industry, the shipping industry, the petrochemical industry, the plastic industry and some other industries that use derivatives from crude oil. So to an extent, oil will continue to be relevant. The only problem is that the major consumer of oil, petrol/diesel combustion engine will disappear. And this will just help to drive nails into the coffin of the oil industry.
Ladies and gentlemen, the future is not good for oil, no matter which way you look at it.
Oil is dead!
And now the question is, what next Nigeria......?