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CHAPTER ONE
INTRODUCTION
Energy crises, with their attendant social and economic cum political consequences are not new phenomena on the International scene. In Nigeria, non-renewable energy, crude oil (petroleum) remains the highest demand energy source. Thus, there has been politics and the causes and consequences of incessant price increase in Nigeria.
Between 1999 and now (2007) pump prices have officially increased from 9419.00 per litre to 8 75 per litre, about 295% increase. In many instances, black market and unofficial pump prices have gone as high as W120 per litre and above.
Wherever there is pump price increase in Nigeria, the justification for the like in prices is always anchored on the need to reduce subsidy in the efforts of subject the determination of prices to market forces. For instance, two days to the end of eight - year rube as elected president of Nigeria, Chief Olusegun Obasanjo affected another increase in the process of petroleum products. By executive fiat, he succeeded in raising the price of petrol from 865.00 to 9475.00 and kerosene from 9454.00 to 964.00 per litre.
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The price of diesel, which was said to have been fully deregulated, was not affected. The reasons for the price increase were the traditional justifications reinforced with supportive ones. The supplementary excuses, this time around, include the need for marketers to recover cost and to enable new investors in crude oil refinery to recoup their money. .
It is obvious that these increases in pump prices are not the long term solution. They are not sustainable crude prices. What it crude prices rise or 180 a barrel or even more? Will we continue to increase our pump prices to ensure that cost of importation are recovered? This is because cost recovery is the plank of the argument put forward by the Petroleum Products Pricing and Regulatory Agency (PPPRA) in allowing increases in pump prices. In any case, Nigeria is the 6th largest producer of crude oil in the world and this is the area where Nigerians are most valuable in the face of large scale pump prices like. To an average Nigerian, when there is pump prices increase, it means more money for governance. And yet, there is vast unemployment and poverty in the c~untry .
Be that as it may, it is painful to notice that the people behind the constant petroleum product price increase have little or no feelings to the economic have little or no feelings to the economic implications their actions. This has generated serious problems in the country ranging from industrial actions mass protects, inflations, civil unrest in Niger Delta, Pipe line vandalization etc.
However, this research work ought to analyze the cause of constant petroleum price increases, the economic implications and the way forward.
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