NIGERIA DEREGULATION: IMPACT AND IMPLICATION
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NIGERIA DEREGULATION: IMPACT AND IMPLICATION
1.1 INTRODUCTION TO CHAPTER ONE
The petroleum oil business is the primary source of income for Nigeria. Prior to the discovery of crude oil, agriculture was the primary source of wealth in this country, and it served as the primary exporting basis. Nigeria currently exports more than 50,000 barrels of oil per day to other countries.
The oil sector is controlled by the federal government and is overseen directly by the Nigeria National Petroleum Cooperation, whose immediate chairman is Chief Fusnso Kupkolukun, who succeeds Pius Obaseki.
The NNPC has the authority to refine Nigerian crude oil, but other petroleum companies like as Orient Petroleum, Cheoron, EIF, Total, and others are exploring land regions for potential crude oil production.
The federal government controls the oil sector, making them the sole monopoly in this area. As a result, President Olusegun Obasanjor declared a deregulation programme that would apply not only to the oil sector, but also to other sections of the economy, including “commercialization and prostration of all sectors of the economy.”
On February 27, 2001, President Olusegun Obasanjo stated in Lagos that deregulation would signal the end of the sector’s existing subsidy arrangement.
Because of the non-competitiveness of Nigeria’s fuel prices, no investor will establish a refining plant in the country, according to Obasanjo. Instead, the government will subsidise social services and improve public utilities such as education, health, transportation, power, and water, he said on the occasion.
Nigeria currently spends billions of dollars each year subsidising oil goods, but there are still occasional fuel shortages. So, the goal of this derogation policy is to ensure that fuel shortages are avoided, as well as the constant labour shortages caused by the constant rise and hike in fuel prices.
Nupeng and pengassen are also included in the regulation process because they are both indirectly involved in petroleum supply, and so a probable shortfall in fuel supply might be triggered by the acovgies of nupeng and pengassen.
1.2 STATEMENT OF THE PROBLEM AND THE PURPOSE OF THE MASTER:
The Ned is working to address the issue of petroleum scarcity and the massive increase in pump prices in its country. The oil sector’s deregulation is intended to reduce this, but the question now is what suitable method should be included in the deregulation.
As a result, the cause of the monopoly in the oil sector by the federal government, the scholiast of oil radials and bunkering, and almost, the inappropriate management of our refining by NNPC, could be traced.
The goal of this study is to determine if the presidential proclamation on deregulation issued in February 2001 will provide the anticipated effects, as well as its impacts and implications.
The goal of this research project is to raise awareness of the impact of deregulation on the oil sector economy and the implications of such policy. Because deregulation is intended to eliminate the existing hurdles and challenges in the oil business.
1.3 BACKGROUND TO THE STUDY
The Nigeria National Petroleum Cooperation (NNPC) cooperation, which controls the country’s oil sector, has been involved in the reefing and supply of petroleum to every hook and corner of the country since the 1960’s,
when Nigeria experienced the era of oil boom, when the main source of revenue shifted from commercial agriculture to oil due to the discovery of crude oil in Nigeria land.
The largest refineries refining crude oil in this country are those in Port Court and Kaduna. As a result, the principal sources of fuel, kerosene, diesel and petrol are dependent on petroleum refining, and this utilisation is also based on supply to various outlets around the country.
The 1990s saw a shortfall of petroleum and ensuing scarcity, which led to price increases by several presidents. As a result, the oil sector did not produce the dividends that were anticipated of it.
So President Olusegun Obasanjo’s decision that the oil business should be deregulated was welcomed with mixed views by everybody and supply in this country.
This lost emotion is related to the fact that it is either a good or a very bad decision because the oil business is a key source of wealth in this country.
As a result, this research project is aimed at determining the impact and implications of the deregulation policy, in order to determine whether the policy, when and if implemented, is the right decision that will permanently solve the issue of scarcity and pump price hikes, or whether such decision is bound to compound the problem of scarcity and pump price hikes.
1.4 JUSTIFICATION OF THE STUDY
This study aims to determine if oil sector deregulation produces the expected results, as well as the benefits that accrue to all and all as a result of policy.
As a result, the rationale for this study is to investigate the oil sector and discover the following:
The causes of constant fuel consumption and shortage.
Deregulation strategy is the best policy for reforming and redirecting our oil sector.
Can this deregulation help to alleviate the recurrent issue of scarcity?
Will this deregulation strengthen our oil sector and restore balance to the country’s economic balances?
So this research report is based on the following retainable, so that in the end, we can distinguish more clearly the deregulation policies and the policies that accompany it,
coupled with the fact that the positive and negative impacts and implications of this policy will be noted, and the rationale will be focused specifically on the impacts and implications of oil sector deregulation.
1.5 THE SIGNIFICANCE OF THE STUDY
It is hoped that deregulation of the oil sector will aid in addressing the scarcity issue. The real goal of the oil sector is to provide a continuous supply of petroleum, which was not achieved prior to the presidential announcement on February 21, 2001, of the intention to deregulated the oil sector.
So the significance of this study is to determine whether the goal of deregulation has been or will be accomplished, and whether the goal of deregulation is the goal in such a comprehensive flap. This study topic will depict the effects and implications of such deregulation policies in great detail.
So, whether deregulation of the oil downstream sector will generate the requisite profits will be determined at the conclusion of this project inquiry. This research is particularly significant since the challenges that our industry is experiencing will be identified, as well as whether such problems may be alleviated.
1.6 DEFINITION OF TERMS
1. The oil industry This is the component of the sphere of business activity associated with the refining and distribution of petroleum throughout the country.
2. According to the Advanced Learners Dictionary, deregulation is the alteration or creation of new regulations in relation to existing issues or programmes.
3. Implications and consequences the effect of such deregulation polices on the oil sector whether polices were able to provide its required consequences.
4. Implication can also be characterised as the tendency for deregulation to be blamed or not be implicated in the oil sector’s difficulties, particularly gasoline scarcity.
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