Nigeria is blessed with vast capacities of oil and is one of the largest fuel exporters. This has generated billions of dollars in revenues over the last years since oil was found in Nigeria.
As seen in most developing countries, this has not translated into an enriched economy for the country. Instead, through inefficiencies, corruption, abuse of powers, mismanagement, smuggling, bureaucratic bottlenecks and excessive subsidizing, the supply of refined crude oil in the country has virtually collapsed.
The Nigerian oil industry is divided into two sectors; the upstream sector, which deals with Exploration and Production and the downstream sector, which deals with refining of crude oil for domestic consumption. The government of Nigeria has decided to emulate other developing and developed nations by privatizing and liberalizing the country’s downstream sector which was previously managed by the Nigerian National Petroleum Corporation (NNPC) on behalf of the government. The Nigerian government has decided to go ahead with the policy even against widespread disapproval on the part of ordinary citizens.
The deregulation policy has been globally embraced by several countries, in order to diminish public sector dominance and for developing a liberalized market while ensuring adequate supply of products. These other countries plan and map out an effective policy response which transcended into full deregulation. The economic reforms of the government have become rather imperative since they are geared towards reviving the ailing sectors. The precedence of some sectors that have been fully deregulated and their achievements were so remarkable that Nigerians had forgotten the scares of the initial experiences.
If Nigeria should borrow a leaf from these nations and allow the downstream sector to be fully deregulated, we are sure to have a success story to tell eventually. Otherwise, Nigeria becomes an onlooker in the policy of oil producing nations. As the recent events unfold, deregulation becomes inevitable. We understand that there is no point running away from the grasping reality, what should be done is that collective efforts should be made to face the challenges stoically than posting the evil day that will most likely befall us. If there must be deregulation, let it be for the building up of the nation and not to further compound the problems of the masses.