CHAPTER ONE
1.1
INTRODUCTION
The petroleum oil sector is the
major area where Nigeria
income emendates. Before the discovery of crude oil, agriculture is the major
source of income in this country and it forms the major exporting base in this
country then. Right now, Nigeria
exports more than 50, 000 barrels of oil a day to other countries in this
country, the oil sector is controlled by the federal government under the
direct supervision of Nigeria National Petroleum Cooperation, whose immediate
chairman is chief fusnso Kupkolukun who succeed Pius Obaseki. The NNPC is
vested with the power refine Nigeria crude oil but other petroleum agencies
like orient petroleum, cheoron, EIF, Total etc con embark in exploration of
land areas that might concern crude and possible extraction.
The oil sector is controlled by the
federal and this makes them to be the sole monopoly of this sector. Therefore,
president Olusegun Obasanjor announced the deregulation policy which not only
restricted to the oil sector, but to other sectors of the economyâ€
commercialization and prostration of all the sectors of the economy. President
Olusegun Obasanjor in Lagos
on 27th February
2001, Obasanjo said that deregulation would mean the end to the
existing subsidy system in the sector.
Due to the Non competitiveness of the
fuel prices in Nigeria,
no investor will establish a refining in the country, said the president,
instead, the government will subside the social services and improve publics
utilities like education, health, transport, power and water Obasanjo said on
the occasion.
Nigeria currently spends billions of U.S
dollars on subsidization of oil products every year, but still experiences fuel
shortages from time to time. So, the aim of this derogation policy is to ensure
that fuel shortages are curbed and that the constant labour stricken because of
the incessant rise and hike in the fuel prices is also curbed.
Nupeng and pengassen are also
involved in the regulatory process, because both are indirectly involved in
supply of petroleum, thereby possible shortage in fuel supply might be
triggering off by the acovgies of nupeng and pengassen.
1.2
STATEMENT OF PROBLEM
AND PURPOSE OF THE PURPOSE OF THE MASTER:
There
is the Ned to redress the issue of petroleum scarcity and the huge rise in pump
prices in it country. The deregulation of oil sector is meant to reduce this
but the question now is what proper process should be involved in the
deregulation. So the cause of dacaricty and high-rise in pump prices might also
be attributed to the monopoly of the oil sector, by the federal government, the
scholiast of oil radials and bunkering and almost, the improper management of
our refining by NNPC.
The
purpose of this study, is to know whether the presidential proclamation on
February 2001 on the deregulation whether it will yield the desired results,
and to know its impacts and implication. This research project purpose is to
bring to the notice the impact of the deregulation has on the oil sector
economy and the implication of such policy. Because, deregulation is meant to
end the existing obstacles and problems inherent in the oil sector.
1.3
BACKGROUND OF THE STUDY
The
Nigeria National petroleum cooperation (NNPC) cooperation that controls the oil
sector of this country, is involved in the reefing and supply of petroleum to
every hook and corners of this country, since the 1960’s when Nigeria
experiences the era of oil boom, that is the period which the mecum source of
revenue shifted from commercial agriculture to oil because of the discovery of
crude oil in Nigeria land.
The
refineries in port court and Kaduna
are the major refineries refining crude oil, in this country. So the major
supplies of fuel, kerosene, diesel and gas are based on the refining of
petroleum and this usage are also based on supply to various outlets in the
country. The 1990’s experience the shortage of petroleum and subsequent
scarcity, which led to the hike in the price by the various presidents. So the
oil sector curled not delivered its dividends, which are expected to it. So the
announcement by president Olusegun Obasanjo that the oil sector should be
deregulated was met by missed feelings by all and supply in this country. This
missed feeling has to do with the fact that it is wise decision or a very wrong
decision since the oil sector is a major income earner in this country.
So
this has led to this research project which is geared towards knowing the
impact and implications of the deregulation policy, this is to ascertain
whether the policy when and if implemented is the right decision that will
permanently solve the issue of scarcity and hike in pump prices or whether such
decision is bound to compound the problem of pump hike and scarcity.
1.4
RATIONALE OF THE STUDY
This
study which is to ascertain whether the deregulation of the oil sector yield
what is supposed to yield and also to know the benefits that are accruable to
all and sundry because of policy.
Therefore,
the rationale for this study to check the oil sector and to find out the
following:
·
The causes of incessant
fuel like and fuel scarcity.
·
Deregulation policy, is
the best policy needed in reshaping and redirecting our oil sector
·
Can this deregulation
curb this frequent issue of scarcity
·
Will this deregulation
strengthen our oil sector and bring equilibriums in the economic balances of
this country.
So this research
report is based on the following retainable, so that in the end, we can be able
to distinguish more clearly the deregulation polices and the polices that
accompanies it, coupled with the fact that the positive and negative impacts
and implication of this policy will be noted so, the rationale will be
specifically on the impacts and implications of oil sector deregulation.
1.5
SIGNIFICANCE OF THE
STUDY
It
is aimed that this deregulation of the oil sector will help in tackling the
issue of scarcity. The real aim of oil sector is the provision of steady supply
of petroleum so since this aim was unable to be achieved before the
presidential announcement on 21st
Feb. 2001, of the aim to deregulation the oil sector. So the
significance of this study is to find out whether the aim of the deregulation
is achieved or will be achieved and that whether the aim of the deregulation is
the aim in such a total flap. This project topic will significantly portray the
impacts and implication of such deregulation policy. So whether the
deregulation of the downstream sector of oil will yield the required dividends
will be found out at the end of this project research. Even this research is
also significant because the problems that our industry is suffering will also
be determined and know whether such problems can be curbed.
1.6
LIMITATIONS OF THE
STUDY AND SCOPE
The
scope of this study covers the deregulation policy of president Olusegun
Obasnayo, its impacts and implication and the reactions and feelings of
individuals towards this deregulation policy. The impact it has on oil
marketing firms like Mobil, EIF and total, so these are what these research
topic is are restricted to all the issues concerning deregulation policy.
Ø Lack
of literature and journals on the deregulation
Ø The
inability of people being questioned to release vital information on this
deregulation.
Ø The
death of literature and journals on deregulation.
Ø The
incorporation attitude of people being questioned.
1.7
OPERATIONAL DEFINITION
OF TERMS
1. Oil
sector this is the part of or field of business activity that is concerned with
the refining and supplying of petroleum to all parts of the country.
2. Deregulation
according to Advanced learners dictionary deregulation means the amendments or
making of another regulations in respect to an existing issues or programmes
3. Impacts
and implication the effect of such deregulation polices on the oil sector
whether polices were able to yield its required results.
4. Implication
can also be defined as the tendency in which the deregulation is to be blamed
or not be blamed in the problems encounter by the oil sector especially that of
fuel scarcity.
REFERENCES
S. Soeze (2002):
The Pan Ocean Cooperation Warri
The Guardian
Newspaper Wed. Feb. 22 2001
Page
3 and Page 6
Vanguard
Newspaper (2001): Tues Feb.
21 2001 Page 1 and 3
K.M Braind The
Articles on Derelictions
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