1.0 Introduction
1.1 Background Of The Study
The economic system practiced by any country determines the type of economic policy that country produces, that is determines the monopoly of power of power in production and distribution activities with special reference to the ownership, decision making as well as incentive structure operating in the country. Karl Polory (1964) distinguishes three (3) main types of economic system as the traditional (subsistence) planned (command) and market economy. However, the field of comparative economic system breaks the above categories into the capitalism, socialism and communism.
The economic system operative in Nigeria are basically the capitalism, socialism and communism system. But with the collapse of the communism and socialism economic policies in 1986 to give rise to a unipolar economic system-capitalism the policy of “deregulation” has been found expedient to implement.
This policy (deregulation) was first mooted during the military era but was given fillip by the present administration.
1.2 Statement Of Problem
Investigation revealed that the effective distribution or allocation of petroleum products through price mechanisms is the responsibility of the government. The best method for dispersing/allocating scarce resources across the nation is the price mechanism, which has been modified. Deregulation is now viewed by policymakers and the government as a way to ensure equitable distribution. When pricing is deregulated, administered mechanisms are replaced.
1.3 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- Does deregulation affect the price of petroleum?
- Does deregulation affect the price of goods and services?
- Does deregulation encourage the growth of the economy?
- Does deregulation improve the standard of living of the people?
1.4 Aim and Objectives of Study
The aim of the study is to investigate the Effect of Deregulation of the Oil Sector on the Nigerian Economy. In achieving this aim, the following specific objectives were laid out as follows:
- To identify the effects of deregulation of the oil sector on the Nigerian economy;
- To assess the season and problems of deregulation of the Nigeria oil sector; and
- To proffer solution based on findings on the study that will be useful for deregulation policy and achievement of stable balance of payments.
1.5 Hypothesis Of The Study
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
Hypothesis One
- H0: Deregulation of the oil sector does not significantly affect the pump price of petroleum products.
- H1: Deregulation of the oil sector significantly affects the pump price of petroleum products.
1.6 Significance Of The Study
This study is significant in the sense that it looks into the deregulation of the Nigeria oil sector as a means of liberalizing the economy and encouraging competition hence, this study is beneficial to both academicians and non academicians as it will enable them know, and it will also suggest solutions to some of the problems associated with the policy.
1.7 Scope Of The Study
The scope of this research will centre around the deregulation of the down stream sector as it affects other sectors of the economy with specific reference.
1.8 Limitations of the Study
During the course of this study, there were some problems encountered which stood as limitations to the research work. Some of the limitations include:
- Time Constraint:
The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Financial Constraint:
Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
- Initial Cooperation Delay from Respondents:
A particular limitation of this work came as a result of the respondent refusal to offer their cooperation at the initial time they were contacted. This contributed in making the success of this research study difficult.
