Deregulation or the removal of fuel subsidy has been boiling over Nigerians because of its attendant problems such as inflation, hardship, unemployment, the government's insincerity and unreliability over promises. The privatization of the downstream oil sector enhance investments and empowerment of Nigerians as well reduce the level of corruption in the sector. The population of study was 400 and a sample size of 200 which give 5% of the total population. Primary and secondary methods of data collection were adopted. Also, three hypothesis were tested the objective of this study is to evaluate the pattern of petroleum prices in Nigeria. The problem of this study is that market failure made government to venture into petroleum product marketing and distribution. The findings revealed that the removal of petroleum subsidy will bring attention on government to promote other relevant sector of economy like education, health and agriculture. And also deregulation will break the monopoly of Nigeria National Petroleum Corporation (NNPC). The following recommendation were made, that the four refineries already established should be maintained and made to operate at full capacity. The government should show degree of honesty, sincerity, accountability, reliability, transparency and integrity in its dealings with the people. This research work focus at social-economic implications of the deregulation by examining the merits and demerits involved. This work recommends that the nation will be better off with this privatization of downstream oil section provided that Nigerians are carried along and government provides the essentials of life as a remedy.

CHAPTER ONE: INTRODUCTION

1.1 BACKGROUND OF THE STUDY
Petroleum products supplied have always been an acid test that is a way of deciding whether something is successful to successive government in Nigeria.
With the new democratic dispensation, the supply and distribution of petroleum products improved but this was without a price-frequent increase in petroleum products prices. Few months to end the regime, the ugly incidence of petroleum scarcity surface again and on e begins to wonder if there is any solution to this problem. The combined impact of erratic and inadequate supply and unending price increases have brought untold hardship to the citizen and worse too, prevented economic recovery as promised by the present democratically elected government given that capacity utilization in the manufacturing sector nose-dives, due to shortage of individual products. Indeed many industries have become compelled to close, due to non-availability of the product.
In a bid to solve the problem in many developing countries, structural reform of petroleum market has become a critical component of macroeconomic liberalization policies. Unexpectedly, the outcome of the deregulation would give room for competition which would transform to price deduction and excellent supply and distribution of the deregulation exercise, critically appraising its impact on petroleum pricing, consumption and the general living standard of the people.

1.2 STATEMENT OF THE PROBLEM
Historically, the major petroleum marketing companies were the main sources of petroleum products supply. The companies transported and distributed the products relying on their distribution and retails outlets.
This way an era of deregulation to which Nigeria paid market determined prices for the products.
The Nigerian activities expanded in the seventies such that private companies could not be able to cope with increase demand fro products. The storage was endemic on regularly found among a particular group and creates social and economic dislocation in the country. The market failure made government to venture into petroleum product marketing and distribution.

1.3 OBJECTIVE OF THE STUDY
The purpose of this study is to appraise the deregulation exercise that was carried out in the Nigerian downstream oil sector. The specific objectives of this study are:

1. To examine the pattern of petroleum prices in Nigeria.
2. To examine the consumption pattern of petroleum products before and after the deregulation.
3. To examine the impact of the deregulation of downstream oil sector on petroleum products pricing in Nigeria.
4. To explore the reasons why deregulation has not yielded the desired result in terms of price and supply.

1.4 RESEARCH QUESTION
The following questions were designed for this study:

1. Is there any relationship between product prices and deregulation?
2. To what extent has the deregulation of the downstream oil sector impacted on petroleum products pricing in Nigeria?
3. How has the deregulation exercise impacted on the consumption pattern of petroleum products in Nigeria?
4. What is the pattern of petroleum products pricing in Nigeria over the year?
5. How does the regulated downstream sector differ from the deregulated era?

1.5 SIGNIFICANT OF THE STUDY
The significance of this study lies in the fact that, it would contribute to the existing literature on the pattern of increase of petroleum products prices in the downstream oil sector. With the intention of alleviating the suffering of the masses.
As products availability, full cost recovery, response to changing circumstance without political intervention, competition and efficiency will drive prices downward; entry of new participants, facility expansion and investment in the sector
Te benefits of deregulation of the downstream sector according to the NNPC are availability of products; non-hoarding of fuel, investment in new facilities, storage tanks, retail outlets trucks, etc, competition among marketers, expansion of facilities, jobs creation and importation of products then sole dependence on NNPC.
Conclusively, deregulation of the downstream will provide a more stable and enabling macroeconomic environment that will guarantee safety of, and reasonable returns on investments. This is the only encouragement of private sector development and ownerships of downstream infrastructures-refineries, depots, pipelines, and associated facilities. Further business opportunities abound when total or complete deregulation comes into practice. The opportunities include lubricants manufacturing, LPG supply and fabrication of pumping facilities and accessories as well as local content of enhancement potentials.

1.6 SCOPE OF THE STUDY
The study seeks to investigate the effects of the deregulation on the prices and consumption of petroleum products as well as its impact on the living standard of Nigerians. The empirical analysis restricted to the period between 1986 and 2010 because it was during that period tax policy was implemented.

1.7 LIMITATIONS OF THE STUDY
The limitations of this study lie in the under listed constraints:

1. There were insufficient journals and textbooks on this topic which led to scanty information that subsequently affected the literature review. However, the researcher made use of the available ones.
2. There was non-existence of already made research work on this topic hence the researcher encountered difficulties in the course of carrying out this research.
3. Time and duration of this project work was too short and this adversely affected the research work.
4. Lack of finance was also one of the limitations faced by the researcher during the time of conducting this researcher work.
5. Lastly, another major constraint was inadequate cooperation by the respondents which reduced the amount of data collected.

1.8 OPERATIONAL DEFINITION OF TERMS
Deregulation is described as the process of government limiting its control in a sector or means of economical production.
Deregulation is referred to as a system in which government lackens (not putting adequate attention laws of control in business or outright withdrawal from it).
Deregulation is characterized by privatization and government selling off her shares in major companies and government bodies are then set to regulate, supervise and control private participation.