Artisanal Crude Oil Refining: Interrogating its non-Formalisation visà-vis Nigeria's Dependence on Petroleum Products Importation.

The downstream sector of the oil industry is critical in the Nigerian economy. It consists of four refineries with a total daily refining capacity of 445,000 barrels. At about sixty percent production, the refineries once met most of the country's petroleum product needs. Lack of maintenance and cumulative neglect however led to their collapse and Nigeria's near total dependence on the import of petroleum products for domestic consumption. This gave rise, among other ills, to the proliferation of unlicensed artisanal refineries in the oil producing communities of the Niger Delta, with associated environmental hazards and the perpetuation of an obnoxious subsidy regime by agents of the Nigerian state and their collaborators. Though the state has continued to clamp down on the artisanal refineries, the fuel subsidy regime which has cost the country billions of dollars in revenue still persists. Opinions are sharply divided in the extant literature on the activities of these artisanal refineries and the government's responses to them. This paper argues for the formalisation of the activities of the artisanal refineries within the context of fundamental reforms in Nigeria's downstream sector. [ABSTRACT FROM AUTHOR]