Deregulation of the Downstream Sector of the Nigerian Petroleum Industry: The Role of Leadership

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Deregulation of the Downstream Sector of the Nigerian Petroleum Industry: The Role of Leadership

Authors
Type
Published Article
Volume
7
Issue
8
Pages
35–46
License
Green

Abstract

This study examined the role of leadership in the deregulation of the downstream sector of the Nigerian petroleum industry. Primary data was collected through structured interview from 230 respondents via questionnaire.The survey method using the questionnaire was adopted in collecting data. Tables were used in the presentation of the data while the mean (x) and simple percentage (%) were used in the analysis of data. This study highlighted the importance and role of leadership in the deregulation of the downstream sector of the Nigerian petroleum industry. The study revealed that corruption, brought about by petroleum subsidy, is obvious in the petroleum industry and that importation of petroleum products to meet local demand by Nigerians is attributable to leadership/managerial problem. It further revealed that leadership upon attainment of independence in Nigeria has not been accountable and transparent in the management of the nation's oil wealth to transform the lives of Nigerians. Leadership role in any organization, public or private, is of paramount importance as the leadership role when effectively carried out or not do affect the performance of an organization. The study concludes by recommending that there is constant need to evaluate what we do in leadership and how we do it irrespective of the position(s) we occupy and/or the sector(s) we find ourselves. 1.0 Introduction The Nigerian petroleum industry, at present, is generally believed to be the pivot of the Nigerian economy and the hub around which other sectors of the national economy revolves, with revenue from oil and gas accounting for about 90% of the nation's foreign exchange and over 70% of revenue. The phenomenal petroleum increase in the national wealth brought in its wake, multifarious problems and responsibilities, in the area of proper revenue accounting as well as social, ecological, environmental pollution, leadership and managerial problems. The petroleum industry is clearly the most dynamic, vibrant and strategic sector of Nigerian economy. The Nigerian petroleum industry is divided into two sectors –the upstream sector (which deals with exploration and production) and the downstream sector (which deals with refining, distribution, and marketing of crude oil for domestic consumption). The interest and passion that usually characterize petroleum discourse in Nigeria is due to inexplicable deprivations and sufferings of Nigerians amidst plenty and abundance. Nigeria is blessed with vast quantities of petroleum and is the sixth largest exporter of oil in the Organization of Petroleum Exporting Countries (OPEC). This has generated billions of dollars in revenue over the past 51 years since oil was found in Nigeria. But this has not translated into an improved economic growth. In the bid to solve such problems characterizing the petroleum sector industry in many countries, structural reforms of the petroleum sector has become a necessity hence recourse to deregulation. In deregulation, the role of government in the sector is being redefined, and markets are being deregulated (i.e. state interventions such as special treatment of state owned oil companies, price controls and monopolies are being broken up). Deregulation policy has globally been embraced by several countries in order to lessen public sector dominance for developing a liberalized market while ensuring adequate supply of products. Such is the story in Peru, Argentina, Pakistan, Philippines, Thailand, Mexico, Canada, Venezuela and USA, all of which have systematically dismantled their state-owned oil companies through deregulation. Deregulation of the downstream sector of the Nigerian petroleum industry, as conceived in 2003, involved the removal of government control on petroleum products prices and the removal of restrictions on the establishment and operations including refining jetties and depots, while allowing privates sector players to be engaged in the importation and exportation of petroleum products and allowing market forces to prevail. The downstream sector operations cover crude oil conversion into refined and petrochemical products and finer chemicals, and gas treatment as well as transportation and marketing of the petroleum products. In furtherance of the deregulation of the downstream sector, the government under the leadership of President Olusegun Obasanjo established the Petroleum Products Pricing and Regulatory Agency (PPPRA) to

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