CENTRE FOR ENERGY, PETROLEUM AND MINERAL LAW AND

POLICY

STATEMENT OF ORIGINALITY

STUDENT I.D.: 090018338

STUDENT NAME: AHMED ADAMU.

PROGRAMME: Msc Energy studies with specialization in Oil and Gas Economics.

MODULE CODE: CP52033 (ECONOMICS OF REGULATION AND

RESTRUCTURING OF ENERGY INDUSTRIES).

TITLE OF THE
RESEARCH PAPER: SHOULD NIGERIA DEREGULATE ITS DOWNSTREAM SECTOR?

ABSTRACT: Nigeria is blessed with oil resource which accrue huge amount of money to
the country every year. Subsequently, it was comfortable for the government
to regulate the downstream sector and subsidised the petroleum products to
make it affordable to the citizens especially the poor. But Recently, due to
low production level of refineries, non reflection of regulated prices at the
retail outlets, exclusion of the targeted group of people from the benefits
and increase in consumption of the petroleum product, government found it
unbearable to continue regulating the sector and decided to deregulate the
country’s downstream sector so that it can discharge its statutory functions
effectively. This has lead to serious challenges and criticisms from some
group of people. Consequently, this paper studied the two divergent
opinions with a view to find out whether it is economically efficient to
deregulate the country’s downstream sector. The paper has empirically
analysed the reform issues and conclude that if the government will be
prudent, committed and adhere strictly to the necessary steps and
recommendations in the process, deregulation will be good for the country
economically and politically.
WORD COUNT: 4,262

PRESENTED TO: DR. XIAOYI MU.

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Date: 11-05-2010.
TABLE OF CONTENTS Page

ABBREVIATIONS:……………………………………………...…... 3
Chapter 1:
INTRODUCTION:…………………………………………… …… 4
Chapter 2:
Rationales for Regulation in Nigeria:................................................... 9
2.1. Support for the poor:....…………………………………... .. 9
2.2. Encourage patronage:............................................................ 10
2.3. Fear of Inflation:…………………………........................... 11
Chapter 3:
Effects of Subsidies and Regulation:................................................... 12
3.1 Demand Growth:............................................................................ 12
3.2 Budgetary Burden:................................................................ 13
3.3 Hinder Growth of Alternatives:............................................ 13
3.4 Targeted individuals not achieved:....................................... 14
3.5 Regulated prices not reflected:.............................................. 15
Chapter 4:
4.1 Why Deregulate Nigerian downstream sector:.............................. 16
4.1.1. Availability of Products:.................................................... 16
4.1.2 Increase Government Savings:.......................................... 17
4.1.3 Environmental standard:......................................................18
4.1.4 Energy Security:................................................................. 18
4.1.5 Other economic Benefits:................................................... 19
4.2 Challenges of Deregulation:......................................................... 19
4.2.1 Lost of Jobs:...................................................................... 19
4.2.2 Inflation:............................................................................ 20
4.2.3 Resurgence of Traditional Energies:................................. 21
4.2.4 Market Exploitation and lack of trust on Government:..... 21
Chapter 5:
Recommendations for Effective Implementation of deregulation in
Nigeria:................................................................................................ 22
5.1 Transparency:........................................................................ 22
5.2 Awareness:............................................................................ 24
5.3 Use the Savings well:............................................................ 24
Chapter 6:
Conclusion:.......................................................................................... 26
BIBLIOGRAPHY………………………………………………....... 28
2
LIST OF ABBREVIATIONS:

Organization of Petroleum Exporting Countries (OPEC)

Nigerian National Petroleum corporation (NNPC)

Barrels per day (bpd)

Pipelines and Products Marketing Company (PPMC)

Petroleum Products and Pricing Regulatory Agency (PPPRA)

Petroleum Motor Spirit (PMS)

Automatic Gasoline (AGO)

Household Kerosene (HHK)

Liquefied Petroleum Gas (LPG)

Turn Around Maintenance (TAM)

International Monetary Fund (IMF)

3
1. INTRODUCTION:

As the sixth largest oil exporter in the Organization of Petroleum Exporting

Countries (OPEC), Nigeria is endowed with abundant quantities of oil,

subsequently; the country generates billions of dollars as revenues from oil

since the last four decades when oil was first found in the country. Despite

the enormous revenues Nigeria gets, it has not reflected into the lives of

ordinary citizens in the country and the Nigerian Economy is continuously

confronting challenges, this may be resulted from inefficiencies, corruption,

abuse of Natural Monopoly Powers, mismanagement, smuggling,

bureaucratic bottlenecks and excessive subsidy.

The Nigerian Oil industry is separated into two sectors: the upstream sector

and downstream sector. Upstream sector deals with exploration and

production while the downstream sector deals with refining and distribution

of crude oil for domestic consumptions. This paper only focused on the

downstream sector and issues relating to its deregulation especially removal

of subsidy in Nigeria, this is because the Downstream sector has a

significant impact on the lives of all Nigerians especially on how the sector

operates. Deregulation is the removal or simplification of government rules

4
and regulations that constrain the operation of market forces. 1 Deregulation

does not mean elimination of laws against fraud, but eliminating or

reducing government control of how business is done, thereby moving

toward a more free market.2

Nigerian downstream sector is managed by the government through the

National Oil Company Nigerian National Petroleum Corporation (NNPC)

which was given the powers and operational obligations in refining,

Petrochemicals and products transportation as well as marketing. Oil

refining in Nigeria dated back to 1965 when the first refinery was built.

Presently, the country has four refineries with the total capacity of

445,000nbpd but operate below its optimal capacities. The supply of

Petroleum products and management of pipeline networks that link these

refineries to bulk customers is undertaken by the NNPC subsidiary known

as Pipelines and Product Marketing Company (PPMC). The bulk customers

otherwise known as dealers supply the products to the millions of

customers throughout the country. These products include Petroleum Motor

1
Sullivan, Arthur; Sheffrin, Steven M. (January 2002). Economics: Principles in Action. New Jersey: Pearson Prentice Hall. ISBN 0-13-
063085-3.
2
Diran Fawibe(2009); The need for complete deregulation in the Nigerian Petroleum Industry International Energy
Services Limited, Lagos Chamber of Commerce and Industry.

5
Spirit (PMS) otherwise known as Gasoline, Automatic Gasoline (AGO),

Household Kerosene (HHK), Fuel Jet and Liquefied Petroleum Gas (LPG).3

In the 1990’s, due to the increase in demand for Oil Products, which

outweighed its supply, necessitate NNPC (as a state owned Enterprise) to

import heavily from abroad to meet the escalating demand, and as a result,

the revenue generates from crude oil export has to be used to import refined

products in to the country. Currently, Nigeria import 85% of refined

products. This has exposes the country to difficulties in funding subsidies

on the refined petroleum products, the country had to borrow from

International Financial Institutions to maintain this subsidy and also spent

more to service the debts. Consequently, the country entered a difficult

situation where meeting the major budget needs of the government became

difficult.4

Considering the fact that international oil prices were increasing and the

real refined productions in the country was dropping the government

decided that it can no longer afford the continued subsidies in the pump

price of the fuels because it was purchasing refined products at huge

3
Nigerian National Petroleum Corporation ( NNPC) 2010, official website.com “ http://www.nnpcgroup.com “
4
Sarah, A. K., (1994), Nigeria: The Political Economy of Oil , Oxford institute for Energy Studies, Oxford University Press.

6
international prices only to sell at a heavily subsidized rate. Presently, one

litre of Petroleum Motor Spirit (Gasoline) is regulated at N65

(US$1=151.38 Naira, as at 21/4/2010) but the actual cost is expected to be

N114.32, therefore for every litre of Gasoline the government pays the

difference of around N49.34. However, Nigerians consumed around 32

million to 35 million litres of Gasoline per day. Therefore, Nigerian

government pays around N1.6 billion (US$1.1 Million) per day on

subsidies.5 The government claim that despite the huge amount spent, the

subsidies did not reach the targeted individuals but rather few higher

income groups, it further claim that continuation of subsidies on Petroleum

Products limits its ability to deliver its statutory functions such as power

generation, security, education health etc.

Consequently, the government found it imperative to resort to selling the

refineries and invites other local Marketers to apply for licenses to build

private refineries. This was not achieved because the marketers who are

profit motivated declined their interest to apply as the government still

regulates the pump price. Subsequently, the recent government considers it

5
Chika, Amaze-Nwachiku, (2010), shake-up looms in oil industry , News paper article, this day News Paper online 21 st
April, http:// www.thisdayonline.com

7
necessary to deregulate and privatized the downstream sector in the

country. However, the deregulation process is now facing serious

challenges and criticism especially from Labour and Trade Unions,

Parliamentarians and the public. It was against this backdrop that this paper

tries to look at this controversial issue with a view to discover whether

deregulation could be important and relevant to the country? The paper

employs empirical literature in discovering and analyzing the issues

surrounding deregulation and its feasibility in Nigeria.

The paper is divided into chapters, the next chapter (Chapter 2) looked at

the rationale for the introduction of subsidy in Nigeria, the third Chapter

studies the effects of subsidies, chapter four analyses the benefits and

problems of subsidy removal in Nigeria and chapter five proposes some

recommendations for effective and successful implementation of

deregulation in the country. Conclusion came under chapter six.

8
CHAPTER 2:

RATIONALE FOR REGULATION IN NIGERIA

“Disruption in the Nigerian downstream sector have deeper and more

immediate domestic and political implications for the country than those

that may occur in the upstream sector” (Sarah 1994), hence the need to

regulate the downstream sector. “Rationale for National regulation is that

uniform national regulations are generally more efficient for nationally

marketed consumer products” (Viscusi, et al, 2005). Generally, government

intervention in the petroleum sector either through public ownership or

through regulation could be justified to ensure adequacy, reliability and

affordability of the petroleum products in a country. Nigeria was not in

exception, as part of the efforts to ensure energy security; the government

provided subsidies on its critical Petroleum products to guarantee the

followings:

2.1 SUPPORTS FOR THE POOR:

Nigeria is growing to a more industrialized and urbanized country where

movements and appliances that require modern fossil fuels were becoming

popular among poor and rich people. However, more than half of Nigerians

9
were living below one dollar per day. Subsequently, the Nigerian

Government deemed it necessary to regulate and subsidised these important

ingredients of human lives to make it reliable, adequate and affordable to

the poor (majority group of people in the country). The government resolve

was due to the appreciation of the fact that the poor man cannot afford the

real prices of petroleum products, this came as a relief and support to the

poor as the government now pays up to 40% of the price of every litre of

Gasoline.

2.2. ENCOURAGE PATRONAGE:

Traditional energy has dominated Nigerian Energy sector until the last forty

years when fossil fuels especially oil and gas were discovered in the

country. To transit to a new and more energy intensive sources, the

Nigerian government introduced subsidies on these Fossil fuels to

encourage people to start using them as it is more flexible and energy

saved. This worked out effectively, as the traditional energy sources were

replaced with Fossil fuels in the country. Though, traditional energy is still

been utilized in the rural areas. But due to the provision of the subsidies the

10
people over concentrated on the exhaustible fossil fuels in their energy

consumptions; this will be elaborated in the next chapter.

2.3 FEAR OF INFLATION:

Oil prices are so volatile and Nigeria import heavily refined products. This

accentuates Nigeria as an oil dependent country to high inflated and

frequent fluctuations of petroleum products prices. This is another reason

for introducing subsidies to protect the citizens from facing the highly

volatile petroleum products prices so that they will continuously face

regulated fixed prices.

11
CHAPTER 3:

EFFECTS OF SUBSIDIES:

Despite the huge amount of money spent in Nigeria to fund subsidies, its

cost is observed to outweigh the social benefits and environmental

improvements. Other adverse effects of subsidies include the following:

3.1 DEMAND GROWTH:

Proving subsidies tend to encourage individuals to consume more even

inefficiently due to the lower petroleum products prices they face in the

market. Over consumptions of fossil fuels will lead to environmental

degradation. This is observed in major Nigerian cities where pollution is

highly concentrated in the atmosphere and congestions across the cities.

Moreover, no one pay for the environmental degradation hence negative

Externality. Similarly, the cost of addressing the environmental challenges

could also be more costly. Therefore, removing subsidies will help address

the environmental issues because consumption of fossil fuels will reduce

relatively.

12
3.2 BUDGETERY BURDEN:

Despite the billions of dollars Nigerian government gets from exporting

crude oil, the country face deficit budgeting due to the heavy subsidies on

fossil fuels, this has restrict the government commitments and concentration

on some other basic infrastructural projects. Subsequently, the government

has to borrow from international financial institutions to fund the budget

and pay for the continue increasing interest on previous loans thereby

adding more weight on the government. The Nigerian government claim

that, if relief from funding subsidies it will use the money to pay back these

loans and deliver its statutory functions effectively.6

3.3 HINDER GROWTH OF ALTERNATIVES:

Due to the heavy subsidies on the fossil fuels in the country, petroleum

products tend to be more attractive and highly concentrated in terms of

consumption. Oil consumption constitute 53% share of the total energy

consumption in Nigeria7. This has disheartened the discovery and

development of some other alternative energy like Solar, wind, geothermal,

biomass and hydro. Subsequently, the country is exposed to the imminent

6
Kupolokun, Funsho, (2005); Liberalization: the experience of the Nigerian Petroleum Sector, Alexanders Gas and Oil
connections, volume 10, issue No. 2, 27 jan.
7
EIA US energy information administration (2009); Nigeria , country analysis brief,
http://www.eia.doe.gov/cabs/nigeria/background.html

13
predicament of fossil fuels depletion. This justifies the necessity to embark

on deregulation so that the savings could be used to develop other

alternative energy source for energy security in the country.

3.4 TARGETED INDIVIDUALS NOT ACHIEVED:

As earlier mentioned, subsidies are aim at providing support to the poor.

However, due to the fact that fossil fuels have dominated every aspect of

human lives whether rich or poor, the Nigerian government provide

subsidies to make the petroleum products affordable to the poor. But

practically, in Nigeria only the rich people who could conveniently afford

the real petroleum products prices enjoy the subsidies because the poor

cannot afford to buy some of the appliances or equipments that require fuel,

for example if Gasoline has been subsidised, it end up only the rich benefit

it, because the poor man cannot afford to buy a car or motorcycle.

Therefore the targeted individuals do not benefit from the subsidy.

3.5 REGULATED PRICE NOT REFLECTED:

14
The petroleum products prices are been regulated in Nigeria but still

consumers pay beyond the regulated prices, this could be due to corruption,

inefficient regulation and monitoring. For example, Gasoline price is

regulated to be fixed at N65 (43 cent) 8 but some of the marketing and

distribution agents sell at a higher prices. Dealers sometimes deliberately

hoard the Gasoline and later sell it when it is scarce at higher prices

sometimes higher than N100. Despite the huge amount of money Nigerian

government spend to provide the petroleum products at a subsidised prices,

the aim is not achieved. Is only at the NNPC retail outlets which is own by

the government that sell at the regulated prices.9

8
Petroleum Products and Pricing regulatory Agency (2010); official website, http://wwwpppra-nigeria.org/
9
Hary, O. C., (2006); Nigeria’s petroleum market segements: characteristics and financing requirement in oil gas
financing in Nigeria: issues, challenges and prospect. Lagos, Nigeria; CIBN.

15
CHAPTER 4:

4.1 WHY DEREGULATE NIGERIAN DOWNSTREAM SECTOR:

“Reform and change are difficult undertaking in any nation. Poor economic

performance in the 1990s, therefore, sparked a vigorous domestic debate

over the need for government administrative reform, economic deregulation

, new accounting rules and other changes to spur more efficient corporate

behaviour” (Edward 2001). Nigeria, like other developed countries decided

to reform its downstream sector to achieve the followings:

4.1.1 AVAILABILITY OF PRODUCTS

The deregulation proposal is based on the assumption that in freeing the

Petroleum products market from its current quantity and pricing

restrictions, the market forces of supply and demand would invariably

operate to regulate the delivered quantity and price which would prevail in

the domestic consumer market. A further addition of this logic claim that

the operation of market forces would ultimately intervene to ensure that the

right quantity of products demanded would be supplied at the cheapest

10
market price.

10
Emmanuel, Ihenacho, (2009); who is afraid of deregulation of petroleum sector, news paper article, daily trust 7th
November.

16
4.1.2 INCREASE GOVERNMENT SAVINGS:

The government, and indeed a large school of informed public and

petroleum industry opinion, generally subscribe to the belief that the

proposed market liberalization policy would upon implementation, lead to

the recovery by government of significant economic benefits including the

opportunity of dissociate from the difficult burden of subsidy payments,

which restrict it from concentrating on the provision of the major

infrastructures in the country. Recently, it is estimated that the projection

for the level of subsidy commitments which the government was

constrained to underwrite for fiscal 2009 amounts to a huge N675 billion or

roughly about a quarter of the entire national budget for the year. The sum

of N675 billion recoverable by way of subsidy cost savings from the

proposed deregulation of the petroleum products market could be used to

buy a tremendous amount of goodwill, social security and welfare if

properly utilized in the development of infrastructure and facilities which

benefit the Nigerian working class/struggling class. 11

11
Supra Notes 7, at 13.

17
4.1.3 ENVIRONMENTAL STANDARD:

Environmental degradations which are largely believed to be as a result of

too much consumption of fossil fuels is believed to be doing harm to the

society, and managing that could be costly as well. By deregulating and

removing subsidy, there will be an efficient and reasonable level of fossil

fuel consumptions in the country thereby mitigating the country’s

vulnerability to pollution and global warming.

4.1.4 ENERGY SECURITY:

Speculation is continue to spread on the imminent fossil fuel depletion, this

could be substantiated by the fact that the world is increasingly relying on

the fossil fuels in meeting energy needs and its production is decreasingly

reducing. This has given a signal to most of the developed countries and

started to develop some other alternative energy sources for energy

security. Nigerian government if relief from the burdensome funding of

subsidies could be able to developed its potential alternative energies

especially renewables.

18
4.1.5 OTHER ECONOMIC BENEFITS:

Apart from the potentials which exist for the elimination of the

government’s current subsidy burden, there are also other significant

economic benefits which are expected to accrue from the implementation of

the market liberalization policy. There will be efficiency in terms of

operations in the refineries and also improvement in investment thereby

creating job opportunities to some Nigerians. The deregulation will also

help to provide correct price signals to the investors as all prices will be set

by the invisible market forces.

4.2 CHALLENGES OF DEREGULATION

4.2.1 LOST OF JOBS:

It is possible that in the short term unemployment may arise due to price

increases and the attendant problem of potential job losses by workers in

the refinery, this will be done by investors who aim to maximize efficiency,

once they acquire control.12 Schipke (2001) notes that, “Countries in which

government was a dominant player in terms of both ownership and

intervention are also likely to have highly regulated labour markets. Hence,

12
Ifiok, Ibanga, (2006), The Economics of privatizating and deregulating the Nigerian Downstream oil sector, florin.com

19
a reduction in government ownership without the simultaneous

liberalization of the labour market will lead to increases not only in

temporary but also permanent unemployment.”

4.2.2 INFLATION:

An abrupt removal of subsidy may cause dislocation to prices of petroleum

products because with high demand, and not enough supply the price would

sky rocket. Similarly, prices of other inputs and commodities will increase

due to the increase in the transportation cost; this may lead to labour strikes

and chaos. This may encourage the military to try and take over governance

using the threat of insecurity to justify their actions as it use to happen in

some developing countries.

4.2.3 RESURGENCE OF TRADITIONAL ENERGIES:

Due to the fact that majority of Nigerians are poor, people may resort to

revive the use of traditional energy sources after the subsidies have been

removed, because the people may not be able to afford the un-subsidised
20
prices of fossil fuels. Usually this may happen in some of the developing

countries.

4.2.4 MARKET EXPLOITATION AND LACK OF TRUST ON

GOVERNMENT

The deregulation constitute selling of refineries to investors, while in

Nigeria only few individuals could be able to buy a major part of the shares,

this accentuate the consumers to market exploitations and collusion among

the suppliers. Similarly, most of the Nigerian government has been

criticized of corruption and un-sincerity; therefore if the present

administration exhibits these habits then it may end up benefiting few

groups of individuals and expose the masses to difficulties.

CHAPTER 5:

RECOMMENDATIONS FOR EFFECTIVE DEREGULATION:

“An obvious way to soften the blow is by doing it gradually. Removing

energy subsidies in one fell swoop is not always politically feasible or

socially desirable. At the same time, it should not be so slow as to allow the

21
costs to persist for too long. Another approach is to directly link subsidy

removal with another measure that is likely to be seen by all or most of the

public as favourable to them, like an across-the-board tax cut. That measure

should, of course, be prudent and appropriate in its own right.”(Trevor

Morgan 2010). The following measures have been identified to build

political support and reform subsidy, and if Nigerian government strictly

adhere to it the implementation of deregulation would easier and effective:

5.1TRANSPARENCY:

In the framework of public policy, transparency refers to the openness and

accountability of governments, particularly regarding expenditure and

decision-making. More specifically, the International Monetary Fund (IMF)

defines fiscal transparency as the extent of the openness to the public about

the government’s past, present and future fiscal activities, and about the

structure and functions of government that determine fiscal policies and

outcomes (IMF, 2007). Transparent procedures include disclosure of

financial transactions, budgets and audit reports.13

13
International Monetary Fund. (2007). Code of Good Practices on Fiscal Transparency. Washington DC: International
Monetary Fund.

22
Improved information about fossil-fuel subsidies, in particular, can help

governments meet their reform objectives. Making the information publicly

available increases awareness of the effects of existing policies and allows

public input to decision-making (Wolfe and Helmer, 2007).14

From the argument in this paper, Nigeria can be pointed out that its cost of

subsidy outweigh its benefits, however the government efforts to deregulate

has been undermined due to the fear that the government may not be

transparent in the process. For the Nigerian government to earn the public

support and confidence in the reform it has to be transparent throughout the

transformation. This has to do with letting citizens to know the amount and

whom the refineries were sold to.

5.2 AWARENESS:

The critics to the government on deregulation may be due to the little or

absence of knowledge on the benefit and what the deregulation entails from

the citizens. Therefore, the government shall embark on a pervasive

14
Wolfe, R., and Helmer, J., (2007). Trade policy begins at home: Information and consultation in the trade policy
process. In Process Matters: Sustainable Development and Domestic Trade Transparency. Eds. M. Halle and R. Wolfe.
Winnipeg: International Institute for Sustainable Development.

23
campaign through individual campaign, as well as Electronic and Print

Media. Vocal middle class citizens shall be educated on the reform and

incorporated in the campaign. Similarly, the information should not be

highly technical or encoded and it should be made frequent and easy

accessible to all citizens.

5.3 USE THE SAVINGS WELL:

Due to the fear of insincerity and corruption from the government,

deregulation has not been embraced by the citizens and considers it non-

beneficial. The Nigerian Government will have a huge financial savings

after the removal of subsidies, as such these savings shall be used

effectively especially in providing the basic infrastructures in the country

like power, roads, education and health. Similarly due to the fact that some

of the poor people may not be able to afford the un-regulated prices of

petroleum products, the government shall use part of the funds to support

the poor by replacing the subsidy with direct transfer or other means of

compensation wherever possible.15

15
Xiaoyi, Mu, (2010), Price Regulation of Petroleum Products, lecture slide, unit 6, Economics of Regulation and
Restructuring of Energy Industries, Centre for Petroleum and Mineral Law and Policy, University of Dundee.

24
Similarly, due to the over reliance on oil in Nigeria, the country is

Vulnerable to the Energy predicament if the speculated oil depletion prove

to be real, therefore the government shall use the funds in discovering and

developing other alternative Energy sources especially the renewables

whose potentials in the country are high, likewise Nuclear Energy.

25
CHAPTER 6:

CONCLUSION:

Every year the Nigerian government spend huge amount of money on

subsidising petroleum products, this has restricts it from discharging some

of its statutory functions and providing the major critical infrastructures in

the country, yet the subsidies did not get to the targeted populace but rather

few income groups. Similarly, the pump prices of the petroleum products

are higher than the regulated price and the four refineries are not up to its

optimal capacities due to what is observed as lack of maintenance. As a

result, the country has to borrow money from abroad and also imports 85%

of refined products to the country. At the same time government has been

blame for the backwardness and other failures in the economy and social

infrastructures. It was against this backdrop that the recent government

became committed on the deregulation process where the refineries will be

sold to almost 50% of the shares to the citizens before other core investors,

so also to give licence to private individuals to import refined products to

the country. To make the free market competitively strong and effective,

the government also as part of the reform decided to remove subsidies. This

26
has made some citizens in the country to vehemently clamour against the

reform on the assumption that it will bring about inflation and suffering in

the country due to the fact that majority of the people in the country are

poor.

Presently, the reform is slacking due to the pressure, scepticism and lack of

interest from the parliamentarians. Subsequently, this paper analysed the

whole reform and study the consequences of regulation and deregulation in

Nigeria with a view to advice whether the country should deregulate its

downstream sector? It was observed that if the government will be

determined, sincere, committed and adhere to the recommendations

proposed in the paper, the deregulation will be far better for the country

socio-economically and politically. Therefore, deregulation is the best

solution for Nigeria in order to solve its economic and social crisis. The

word limits of the paper has restrain the author from dwelling on the effects

of deregulation on the major macro economic variables in Nigeria, which

require a dedicated research consideration.

27
BREFERENCES:

BOOKS:

Edward, J.L., (2001), Arthritic Japan: The slow pace of economic reform,
Brookings Institution press, Washington, D.C.

Sarah A. K. (1994), Nigeria: The Political Economy of Oil , Oxford

institute for Energy Studies, Oxford University Press.

Schipke, Alfred, (2001), Why do Governments Divest? : The

Macroeconomics of Privatization: Berlin: New York: Springer, (p. 67).

Sullivan, Arthur; Sheffrin, Steven, M., (January 2002). Economics:

Principles in Action. New Jersey: Pearson Prentice Hall. ISBN 0-13-
063085-3.

Viscusi, W., et al, (2005), Economics of Regulation and anti-trust, 4th

edition, the MIT press, Cambridge, Massachusetts London, England.

ARTICLES:

Diran, Fawibe, (2009), The need for complete deregulation in the Nigerian
Petroleum Industry International Energy Services Limited, Lagos Chamber
of Commerce and Industry.

Hary, O. C., (2006), Nigeria’s petroleum market segements: characteristics

and financing requirement in oil gas financing in Nigeria: issues, challenges
and prospect. Lagos, Nigeria; CIBN.

28
Ifiok, Ibanga, (2006), The Economics of privatizating and deregulating the
Nigerian Downstream oil sector, florin.com

Kupolokun, Funsho, (2005), Liberalization: the experience of the Nigerian

Petroleum Sector, Alexanders Gas and Oil connections, volume 10, issue
No. 2, 27 jan.

Wolfe, R., and Helmer, J., (2007). Trade policy begins at home:
Information and consultation in the trade policy process. In Process
Matters: Sustainable Development and Domestic Trade Transparency. Eds.
M. Halle and R., Wolfe. Winnipeg: International Institute for Sustainable
Development.

OTHERS:

Chika Amaze-Nwachiku (2010);shake-up looms in oil industry , News

paper article, this day News Paper online 21st April, http://
www.thisdayonline.com

EIA US energy information administration (2009); Nigeria , country

analysis brief, http://www.eia.doe.gov/cabs/nigeria/background.html

Emmanuel Ihenacho (2009); who is afraid of deregulation of petroleum

sector, news paper article, daily trust 7th November.

International Monetary Fund. (2007). Code of Good Practices on Fiscal

Transparency. Washington DC: International Monetary Fund.

Nigerian National Petroleum Corporation (NNPC) 2010, official

website.com, http://www.nnpcgroup.com

29
Petroleum Products and Pricing regulatory Agency (2010); official website,
http://wwwpppra-nigeria.org/

Trvor Morgan (2010); Revealing the high cost of energy subsidies , an

interview. Global subsidies Initiative (GSI). http://www.globalsubsidies.org

Xiaoyi Mu (2010); Price Regulation of Petroleum Products, lecture slide,

unit 6, Economics of Regulation and Restructuring of Energy Industries,
Centre for Petroleum and Mineral Law and Policy, University of Dundee.

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