Central Bank of Nigeria
Economic Reforms, Downstream Petroleum Sector, Deregulation, Oil and Gas
This article examines the social implications of the deregulation of the downstream petroleum sub-sector in Nigeria. The deregulation of the downstream petroleum sector is part of the economic reform package of the present administration that is designed to among diversify the economic base of the country and reduce the relative dominance of the oil sector, and to create a vibrant sector that can respond to the rigors of market forces (NEEDS Document,). The article covers topics that include: an examination of the the downstream sub-sector and the rationale for deregulating the downstream sub-sector. This is that optimal allocation of resources can only take place when prices of resources are allowed to be determined by the market forces in a competitive environment. Other issues examined includes the removal of oil subsidy. this is followed by the examination of the social implications deregulation which include: increased government revenue; poverty and social inequity; competition; price determination by market forces; and social ills (vandalization of pipeline, smuggling, black-marketeering, corruption among government officials in the sector, adulteration of products, artificial scarcity). The article concludes by stressing that deregulation of the downstream sector will: ultimately impact positively on the social lives of Nigerians; ensure that good quality fuel is available when we need it and at competitive prices; availability of products will put an end to adulteration and the black market Contrary to what most people believe, deregulation will not impoverish Nigerians because it will reduce rather than increase prices; create more jobs and give means of livelihood to thousands of Nigerians.
CBN Economic and Financial Review (EFR)
Ugbam, O. (2004). The social implications of the deregulation of the downstream petroleum sub-sector. Economic and Financial Review. 42(4), 145-160.