ABSTRACT 

This research examined how the Oil Boom in Nigeria has underdeveloped the nation ratherthan develop and also examining the challenges or problem faced in premium motor spiritimportation into   the country   as   a   result   of   corruption,   inability   to   refine   our  crude   oil,increase   in   crude   prices,   subsidy   payment,   shortage   of   foreign   exchange,   alsomismanagement   and   theft   by   a  sophisticated   network   of  public   officials  and  indigenousbusiness men. The surplus availability of oil in the Nigerian state is more of a curse, disasterthan a blessing as majority of her total population still live below the poverty line and thereis no or less evidences of development. The research method adopted in the course of this work is the Qualitative Research methodand Quantitative method. Most of the information is a gotten from secondary sources whichis based on journals, articles, reports, newspapers, treaties and existing materials on theNigerian Oil industryThis   research  critically  examined  the  role   of corruption   resulting from  the  oil   boom  inNigeria in relation to the underdevelopment currently being experienced in the country andalso problems faced in the importation of premium motor spirit, the impact of deregulation,leading us to talk about paradox of plenty, fuel subsidy role in aiding corruption, OPEC rolein contributing   to   Nigeria’s  problems.  And also the  challenges   of  premium   motor   spiritimportation, Nigerian economy before and after the discovery of crude oil and the cases ofcorruption within the context of resource allocation in the country.Corruption which is the root cause of underdevelopment and has become persistent in theNigerian state and almost has become and accepted way of living and it has sort of becomeNigeria’s   identity   in   the   international   world.   Corruption   has   resulted   to   the   poorcontribution of the oil sector to the economic advancement. There is need for the activationof  defunct refineries, also for importers to be given concessions so as to reduce cost ofbusiness. The government has to build more refineries, minimization of PMS importation.There is also the need for a safe environment to work.Some of the keywords in this work include: Oil boom, Crude Oil, Premium motor spirit,Corruption, and   fuel subsidy.

TABLE OF CONTENT 

Title Page     i

Table of Content     ii

Declarationiii

Certification    iv

Dedicationv

Acknowledgementv

iList   of   acronyms   and   abbreviationsvii

Abstractviii

CHAPTER ONE

1.0 Background to the study………………………………………………………..1

1.1 Statement of the problem………………………………………………………..4

1.2 Research Objectives………………………………………………………….….4

1.3 Research questions……………………………………………………………….5

1.4 Research methodology…………………………………………………………...5

1.5 Significance of the study………………………………………………………….5

1.6        Scope the study…………………………………………………………………....6

1.7  Definition of terms………………………………………………………………...6

CHAPTER TWO: LITERATURE REVIEW AND THEORETICAL FRAMEWORK

2.0 The Discovery of oil in Nigeria……………………………………………………………8

2.1  Theoreticalframework…………………………………………………………………....11

2.1 Paradox of Plenty theory…………………………………………………………………11

2.1.1 Chapter of economic rights and duties of states (1974)……………………………...13

2.1.2 Permanent sovereignty over natural resources……………………………………....14

2.1.3 Declaration for the establishment of a new international economic order……….…16

2.1.4 Qualified interest theory…………………………………………………………….17

2.2 Corruption and the oil sector……………………………………………………….…..18

2.2.1 Characteristics of corruption in the oil sector……………………………………...19

2.2.2 Types of corruption in the petroleum sector……………………………………...20

2.2.3 Corruption and oil boom as the main cause of development in Nigeria…………..21

CHAPTER THREE

3.0 Investigate the role of subsidy in PMS……………………………………………………22

3.1 Role of corruption in PMS importation…………………………………………………..23

3.2  Effects   of   corruption   in   PMSimportation………………………………………………...24

3.3  Petroleum exportation and PMS importation paradox……………………………………25

3.4  Role   of   Nigeria   being   an   OPEC   cartelmember…………………………………………..26

3.4.1  How   OPEC   is   contributing   to   Nigeria’s   economicproblems…………………………..27

3.5 Impact of deregulation in petroleum industry ……………………………………….28

3.5.1  Potential   benefits   of   deregulation   of   the   downstream   oilsector………………………..29

3.5.2 Relevance of the deregulation in the downstream oil sector…………………………...30

3.6 Definition of fuel subsidy and its impact in Nigeria’s economy…………………….…...31

3.6.1 Verification and reconciliation of fuel subsidy imports payments……………………..33

3.6.2  Reasons   for   verificationexercise……………………………………………………….35

3.6.3 Oil and gas cases and materials (2010/2012)…………………………………………..35

CHAPTER FOUR

4.1  Eradication   of   corruption   in   the oilsector………………………………………………...36

4.1.1The proposed petroleum bill…………………………………………………………….38iii

4.2  Few   cases   of   corruption   scandals   in   thecountry………………………………………….39

4.3  Eradication   of   corruption   in   subsidy   arrangement   of   PMSimportation…………………..42

CHAPTER FIVE 

5.1 Summary………………………………………………………………………….45

5.2 Conclusion………………….…………………………………………………….46

5.3 Recommendations………………………………………………………………..47