Regulatory Complexity and Compliance Costs in Nigeria’s Petroleum Sector: A Law and Economics Analysis

This study applies a law and economics analytical framework to the problem of regulatory complexity and compliance costs in Nigeria's petroleum sector, generating original theoretical and empirical insights into how legal fragmentation imposes efficiency losses on operators and ultimately reduces government revenue and community benefits. Nigeria's petroleum sector is regulated by at least fourteen distinct statutory instruments and five principal regulatory agencies, creating a multiplicity of overlapping requirements that impose substantial compliance transaction costs. The research employs a law and economics methodology, combining quantitative compliance cost measurement with theoretical modelling of how regulatory complexity affects investment decisions and compliance behaviour. Original empirical data are generated through a structured cost survey of compliance expenditures in fifty petroleum companies across the upstream, midstream, and downstream sectors in 2023 and 2024, verified through financial statement analysis. Theoretical models from regulatory economics, transaction cost theory, and public choice theory are applied to explain patterns of strategic non-compliance and regulatory arbitrage. The study generates an original Petroleum Regulatory Complexity Index for Nigeria and develops welfare-maximising regulatory simplification proposals grounded in law and economics principles. Keywords: regulatory complexity, compliance costs, law and economics, petroleum sector, Nigeria.