Downstream Deregulation Policy and Stability in Petroleum Products in Nigeria: A Case of South-South Region

Abstract

Nigeria economy is almost singularly hinged on crude oil and therefore, highly sensitive to internal and external shocks in the oil sector. This study examined the impact of downstream oil deregulation policy on stability in petroleum products in Nigeria. Survey design was used in the methodology of the study. The hypotheses formulated were tested using ordinary least squares linear regression technique. The study revealed that the downstream oil deregulation policy promotes the availability of petroleum products in the economy. The study also revealed that local refining of petroleum products positively impacts on deregulation of the downstream oil policy in the country. It was further revealed from the findings that the removal of petroleum products subsidy and efficient pricing of petroleum products enhances the deregulation of the downstream oil policy in the Nigerian economy. It was recommended that the government should make petroleum products available through efficient liberalization of the downstream sector, remove subsidies, build more refineries or maintain the existing ones and regulate the prices of petroleum products in the country. Government should get all the four refineries working at all costs. This will help to reduce the huge amount of money spent on refined fuel importation and will be diverted to infrastructural development for the economy.