THE EFFECT OF DEREGULATION OF THE DOWNSTREAM OIL SECTOR AND ITS EFFECT ON THE NIGERIAN ECONOMY

ABSTRACT

This study evaluates deregulation of the downstream oil sector and its effect on the Nigerian economy. This study arose out of the need to find solution to the sorry state of the four refineries, the inefficiency in the distribution, the poor pricing of petroleum products and the negative effects of monopolistic structure of the downstream sub-sector. The study attempt to identify the challenges associated with deregulation of the downstream sub-sector and to examine the effects of deregulation of the downstream sub-sector on petroleum product pricing in Nigeria. The study examine the extent to which deregulation has impacted on availability of petroleum product since 2003. The study progressed to identify what policy options are there for improved performance in Nigerian downstream sub-sector. The descriptive survey research design was used and data was collected using questionnaire method. Chi-square and simple statistical methods was used for data analysis. The findings of the study among others review of deregulation of the downstream is to open the market for new investors and reduce government spending on subsidy payment.It is recommended that government should in effect provide the broad guidelines for the operation of refineries and allow private initiative in running of refineries Finally, government need to create an enabling environment for private individuals and companies to establish refineries and should double the quantity of crude for domestic refining needs, in this way, the country should target supplying the refined needs of these would be investors.

KEYWORDS: DEREGULATION, DOWNSTREAM, REFINERIES, OIL, SUB-SECTOR, SUBSIDY, ECONOMY

TABLE OF CONTENTS

                                                                                                                  Pages

Title Page                                                                                                                    i

Certificate                                                                                                                    ii

Dedication                                                                                                                   iv

Acknowledgements                                                                                                     v

Abstract                                                                                                                       vi

Table of Contents                                                                                                        vii

CHAPTER ONE: INTRODUCTION

1.1       Background to the Study                                                                                1

1.2       Statement of the Problem                                                                               6

1.3       Objectives of the Study                                                                                  7

1.4       Research Questions                                                                                        7

1.5       Research Hypotheses                                                                                      8

1.6       Justification of Study                                                                                      8

1.7       Scope of the Study                                                                                          10

1.8       Organization of the Study                                                                               10

1.9       Definition of Terms                                                                                         11

CHAPTER TWO: LITERATURE REVIEW

2.0       Introduction                                                                                                    12

2.1       Conceptual and Theoretical Review                                                               15

2.2       Empirical Review                                                                                           22

2.3       Reasons for the Deregulation of the Nigerian Downstream oil Sector          28

2.4       Implication of the Review of the Current Study                                           36

CHAPTER THREE: RESEARCH METHODOLOGY

3.1       Theoretical Framework                                                                                   41

3.2       Methodology                                                                                                   41

CHAPTER FOUR

4.1       Presentation of Results                                                                                   48

4.2       Discussion of Results                                                                                      70

4.3       Comparison of Result with Previous Findings                                               72

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1       Summary of the Findings                                                                               79

5.2       Conclusion                                                                                                      79

5.3       Recommendations                                                                                           80

5.4       Limitations of the Study                                                                                 82

5.5       Suggestions for Future Research                                                                    83

References                  

Appendix