This study seeks, to examine an appraisal of the Nigerian oil sector-issues and challenges between 2008-2012. In addition, the study sought to evaluate if the Nigeria oil sector has impacted positively on the overall development of the country as required. The interactive interview was employed to explain the theoretical and empirical analysis of this study. The study applied normal z-test to ascertain if the variables needed for infrastructural development can be achieved and to ascertain if oil production has improved the living standard of Nigerians.
The result of the z-test on oil production and infrastructural development of the country reveals that the industry has positively impacted significantly on the infrastructural development of the country. Also, the result of the Z-test on causal relationship between oil production and standard of living of Nigerians reveals that there is no significant casual relationship between the oil production and the standard of living in the count. The researcher recommends that Nigeria oil sector should contribute effectively in improving the living standard of Nigerians and the overall development of the economy.

Title Page
Approval page
List of tables
Table of contents

1.1       Background of the Study
1.2       Statement of Problem
1.3       Objectives of the Study
1.4       Research Hypotheses
1.5       Significance of the Study
1.6       Scope and Limitations of the Study

2.1       Origin of Nigeria Oil Industry
2.2       Nigeria Economy and the Oil Industry
2.3       Contributions of the Oil Sector to Nigeria Economy
2.4       Oil Industry and Fuel Subsidy
2.5       Issues in the Removal of the Fuel Subsidy
2.6       Consequences of Fuel Subsidy Removal
2.7       Challenges in the Oil Sector
2.8       Oil Sector and the Infrastructural Development of
the Nigeria Economy
2.9       Oil Sector and the Standard of Living of Nigerians

3.1       Selection of Data
3.2       Area of Study/Population of Study
3.3       Questionnaire Design
3.4       Data Collection Method
3.5       Analysis of Data
3.6       Theoretical Concept of Analysis

4.1.1               Social Strata of Respondents
4 .1.2              The Standard of Living of Average Nigerian
4.1.3               The Condition of Nigeria Growth
4.1.4               The Contribution of Oil Sector to the Overall
Economic Growth of Nigeria
Level of Infrastructural Development in Nigeria
vis-à-vis Oil Sector Contribution to Overall
Economic      Growth
4.1.6               Impact of Oil Sector Contribution on the Standard of Living of Nigerians
4.1.7               Other Sectors that Contributes to the Standard of
Living of Nigerians
4.1.8               Impact of Oil Subsidy Investment in the Standard of Living of Nigerians
4.1.9               Further Subsidy Withdrawal for Investment
4.1.10                         Areas that Government should invest more of the
4.1.11                          Oil Subsidy Withdrawal
4.1.12                          Does Oil Production in Nigeria cause any damage to the citizens of Nigeria
4.1.12             Does Oil Production Nigeria Provide Employment
Opportunities for her Citizens
4.1.13             Does Federal Government Effectively Allocate the
Benefits that accrue from Oil
Production to Nigerians
4.2                   Analysis of Hypotheses
4.2.2               Hypothesis I
4.2.2               Hypothesis II

5.1       Summary
5.2       Conclusion
5.3       Recommendations
Appendix I
Appendix II

1.1 Background of the Study
The growth of oil sector in Nigeria appears to have brought dramatic changes in the structure of the economy since 1970. In less than a decade, agriculture’s share of Gross Domestic Product (GDP) declined from roughly 50% to less than 30% and its erstwhile pre- eminence as generators of state revenue and foreign exchange all but vanished.
Crude oil become one of the world’s most strategic natural resources required as crucial input in contemporary economic activities. It is a highly demanded commodity in both rich and poor countries, providing about 5 of the global energy requirements. (Eke, 2010). In Nigeria, the oil industry has risen to the commanding heights of the economy, contributing the lion share to Gross Domestic product (GDP) and accounting for the bulk of federal government revenue and foreign exchange earnings since 1970.
Thus oil sector have assumed a predominant role in the global economic framework, providing much of the energy that drives the economy in both industrialized and developing countries. In Nigeria, the nature of the oil sector remains the predominant source of revenue generation of federal government. It also remains a priority for the Nigerian government as the revenue that comes from oil resource exploitation is a major source of foreign income for Nigeria and a means of settling her external debt oil sector is also a source of taxation revenue and employment and offers the opportunity for the transfer of technology from developed to developing counties. In this respect, the Organization of Petroleum Exporting Countries (OPEC) which comprises eleven countries from the developing world, has played a leading role in the global oil industry, promoting market stability and ensuring steady flow of revenue accruing to member countries of the cartel.
However, the emergence of oil as a major commodity in the global market has transformed the economies of Nigeria. It has served to boost economic growth and accelerated development and has heralded structural difficulties which have undermined economic performance and compounded development trends in Nigeria. Indeed, Nigeria’s extreme reliance on the crude oil market has triggered structural difficulties for the economy; as earnings from crude oil fluctuate along with market trends which are exacerbated by the country’s neglect of other productive sectors of the economy.
In recent time, government found it necessary to ascertain how much crude oil would be adequate for domestic petroleum product demand. In achieving this goal, they try to get rid of a policy that various governments’ have attempted to reform but failed. This has called for subsidy removal to help government address the imbalance between recurrent and capital expenditures in Nigeria, encourage foreign investment in downstream sector, infrastructure, free move of funds for local investment in the oil sector, increase and repair of local refinery production, reduce importation of refined products in the medium to long-term and eventually stabilize market prices as completion increases. Therefore, the idea is a good one as it was intended to give the average Nigerian access to cheap petroleum products.

1.2       Statement of Problem
In spite of the contributions of oil sector to the growth of the Nigerian economy and the ameliorating of poverty, the rate of if development does not seen to be commensurate with the rate of misery brought to the country. Oil production has brought supply uncertainty fueled by the poor management of the nation’s refineries, endemic corruption, lack of transparency, undue government interference and unnecessary bureaucratic processes. Despite the nation’s huge endowment of crude oil and gas and the extensive infrastructure available in the sector for exploration, distribution and marketing of petroleum products, the oil sector has been hit by increased instability hall-marked by a dearth of product of supply. Particularly, this problem has become noticeable and has led to massive importation of petroleum products by federal government and major oil marketers in Nigeria.
Therefore, in a bid to ascertain the effects of oil sector on Nigerian economy, the researcher provides the following research questions:
i.          What impact has oil production in Nigeria had on the infrastructural development of the country?
ii.         Is there any causal relationship between oil production in Nigeria and the standard of living of Nigerians?
1.3       Objectives of the Study
This study has its broad objective of, “Appraising the Nigerian Oil Sector, Issues and Challenges between 2008-2012” specifically study seeks to:
(i)        Determine the effects of oil production on infrastructural development of the country.
(ii)       Ascertain the impact of oil production in the standard of living of  Nigerians.
1.4 Research Hypotheses
To accomplish the objectives of the study, the following hypotheses were formulated:
Hypothesis I
Ho:      Oil production in Nigeria over the years has not positively impacted significantly on the infrastructural development of the country.
H1:      Oil production in Nigeria over the years has positively impacted significantly on the infrastructural development of the country.
Hypothesis II
Ho        There is no significant causal relationship between oil production in Nigeria and the standard of living of Nigerians.
H1:      There is significant causal relationship between oil production in Nigeria and the standard of living of Nigerians.

1.5       Significance of the Study
The goal of this research work is to provide a basic tool for other researchers and understanding of the contributions of oil sector in the development of the Nigerian economy vis-à-vis infrastructural development and the standard of living of Nigerians.
The findings of this research work and the recommendations contained therein will form a robust working material for researchers and government agencies in creating a fountain of knowledge for the experimentation and substantiation of their policies on oil sector in the country and in the execution of projects to improve the economic growth and infrastructural development of the country, as well as improve per capita income of her citizens.
The study will also help the policy makers to draw a rational conclusions on the way forward by improving the oil sector in meeting up with the country’s expectations. The study will extend the existing literature by emphasizing on the issues and challenges of the oil sector in Nigerian economy.
1.6       Scope and Limitations of the Study
This study shall make use of data from 2008-2012, a total of five years. The study will focus on the issues and challenges facing the Nigerian oil sector.
One of the major challenges of this study was the scarcity of data on the research variables. It was difficult in sourcing accurate and reliable, data from the repositories like the Central Bank of Nigeria (CBN) and Federal Bureau of Statistics (FBS). However, these limitations did not significantly affect the study.
Time frame required to carry out this research was short. But, the researcher speared no time, hence was able to cope with the timing.


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