Impact of Deregulation of the Downstream Petroleum Sector in Nigeria

Abstract

The oil industry has been contributing immensely to the Nigerian economy and that is why over 80 percent of the country foreign exchange earnings come from this sector. Since the discovery of oil in commercial quantity in 1956, Nigeria has been experiencing consistent increase in revenue earning. Even with this increase, Nigerians are yet to enjoy the basic necessities of life. We have witness strikes and demonstrations against poor suppliers, incessant increase in the pump price of refined products. In a bid to reduce the burden on the citizenry, the federal government introduced subsidy which was to make prices of petroleum in the country cheaper for consumers to buy. But, alarmingly, the price of the product continues to escalates even the huge amount spend on subsidy. It is against this background that this paper seeks to assess the impact of the deregulation of the downstream oil sector. The source of data for the study area mainly secondary and neoliberal theory was utilized to assess the impact of the deregulation of the downstream oil sector towards' economic development. The paper revealed that deregulation of the downstream oil sector to achieve its goal of economic development in Nigeria, government at all levels should put in mechanism such as EFCC, ICPC and other related agencies to tight corruption and ensure effective way for the success of full implementation of deregulation policy. The paper’ therefore recommends that deregulation of ’the downstream oil sector must be' gradually and consistently pursue to revive maximum result. Moreso, the existing refineries should be maintained and made to operate at full capacity.