The Political Economy of Oil Price Deregulation and the Subsidy Fraud Crisis: A Study of Systematic Bureaucratic Corruption in Nigeria

Abstract

The management of the oil sector in Nigeria over the year has left much to be desired owing to the unacceptable scale of corruption and poor management. The decay in the oil sector due to systematic neglect of the refineries, corruption, inept management, stealing, and vandalization of oil installations (pipelines, flow stations, operational equipments, etc,) have left the oil industry in a dire state calling for desperate reforms and measures. The paper showcases the scale of decay in terms of corruption and poor infrastructure with the discovery of trillions of Naira in purported expenditure on fuel importation that never came to the country; the paper also x-rays the managerial structures in the oil industry and their impacts on the sector itself. The seed data for analysis was provided by the audit report by an independent firm: KPMG & S.S. Afemikhe & Co.; government published data on financial disbursement and published empirical data on Nigerian oil industry from independent sources. The paper also attempts to define the scope of the problematic by scratching below the surface of identified causes and problems and concludes by presenting some possible leeway out of the economic, social and political quagmire, which includes the exercise of the political will for the enablement of the rule of law to strengthen the various anti-corruption institutions and their statutory powers.

Keywords: Oil subsidies, Deregulation, Corruption, Managerial Structures, Fuel Importation, Authoritarianism, Neo-patrimonialism.