Nigeria oil reforms risk being bogged down in bureaucracy

Nigeria oil reforms risk being bogged down in bureaucracy

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Drivers in Lagos last week were paying N162 ($0.40) per litre of petrol, among the lowest rates in Africa — beneficiaries of a fuel subsidy that costs the continent’s biggest crude producer billions of dollars a year. 

It was a reminder that while Nigerian president Muhammadu Buhari signed a big oil industry reform act last month — which dictates that fuel should be sold at market prices — little is likely to change soon in Nigeria’s moribund oil industry, or the economy that relies on it.

The bill, first put forward more than two decades ago, will create separate regulatory bodies, commercialise the national oil company and bolster the nascent gas sector, moves the government say will help attract billions of dollars of new investment. In a concession to oil companies, which had long clamoured for more fiscal certainty, it will simplify and reduce some royalties and taxes.

But as the petrol pumps in Lagos made clear, the act, which came into effect upon Buhari’s signature, may take years to be fully implemented.

After decades of calls for reform and business complaints about an opaque and unwieldy regulatory and fiscal