Federal government's insistence on full deregulation of the downstream domestic oil industry and the vow by organized labour to resist the move stoke fears that this year's yuletide season might be fraught with social unrest.

Indications of looming battle are visible as government insists on pressing on with full deregulation of the market while the organized labour has scheduled to begin preliminary campaigns to sensitise Nigerians for grandscale protest.

Whereas government has paid deaf ears to warnings by labour, sociopolitical and civil society groups in the country, the leaders of the groups have started mobilizing members to brace for action.

Minister of Petroleum Resources, Dr. Rilwanu Lukman, said deregulation of the market was a concluded decision, adding that the considerations were ongoing on the right time kick off.

As part of the preparations, government has started stocking petroleum products to ensure that the market liberalization dreaded to trigger inflation in the already distressed economy would not also create supply gaps and associated ills.

Directorate of Petroleum Resources (DPR) has also placed players in the market on notice about the impending deregulation and the expected crisis, appealing to them to support government with products supply and efficient distribution in the trying moments.

Director of DPR, Mr. Billy Agha, who addressed all categories of markers in the country at a meeting in Lagos, also warned them against sharp practices by checking products diversion, adulteration and hoarding, saying that extreme measures would taken against such acts.

To woo the marketers' support, government has also approved settlement of all outstanding subsidy bill owed them by the end of the month as a way to addressing concerns over their capacity to assist with importation.

Also to ensure divers supply sources to the local market after deregulation, government declared weekend that the nation's four refineries in Port Harcourt, Warri and Kaduna would be restreamed before implementation of the policy.

Dr. Lukman disclosed that the refineries were being rehabilitated to attain their respective installed processing capacity totaling 445, 000 barrels of crude oil per day.

Dr. Lukman said three of the refineries were now restarting and are pushing towards operating at full capacity.

He said the refineries were being primed ahead of delivery of pipeline restoration contract to connect feedstock conduit to the plants.

Business Champion gathered that the Pipelines and Products Marketing Company (PPMC) of the Nigerian National Petroleum Corporation (NNPC) has been working tirelessly to fix the sabotaged Chanomi Creek pipleline wich connects crude oil to both the Warri and Kaduna refineries.

Two refineries in Port Harcourt are currently in operation with a capacity of around 210,000 barrels per day, according to NNPC.

Warri Refinery has installed capacity of 125,000 bpd while Kaduna Refinery has a capacity of 110,000 bpd. Both refineries are fed by Chanomi Creek crude oil pipeline from Escravos oil fields.

A lull in violence in the Niger Delta has enabled workers to complete repairs on the pipeline, which has been attacked by militants in the past.

Nigeria's refineries have a total nameplate capacity of 445,000 bpd but have never operated at full capacity. Even if they did, they would produce only 18 million litres of petrol out of estimated average peak daily demand of 32 million litres.

Refinery outages caused mainly by mismanagement and sabotage have forced the Nigeria to depend on massive fuel imports for its domestic needs.

"Even when they are at full capacity, we will still need to import oil products," Lukman said.

His comments on the refineries came as government also stepped up importation of petroleum products in the last two months of the year to raise enough stock that would last well into the New Year.

Currently, NNPC has placed orders for 128 cargoes of petroleum products to keep the market wet ahead of expected crisis when government begins full implementation of the deregulation policy.

Also, market players have criticized the high volume of import by NNPC, arguing that it would create state monopoly, leave little space for private importers in the market and create distortions in cost templates at a time of high oil prices.

Given the high social opposition that has risen against the planned deregulation, government's insistence on pressing on with the policy implementation is viewed as a guarantee of social crisis as witnessed in the past.

Already, the nation's powerful labor unions have vowed to protest against the government's plan to remove fuel subsidy and threatened to hold rallies across the country from Wednesday.

"The NLC has always opposed and remains opposed to the deregulation of the oil and gas sector in general and of petroleum products in particular," the Nigeria Labour Congress said in a statement.

"We call on Nigerians to join our patriotic marches and rallies to convince President Yar'Adua and his government not to embark on this catastrophic road," the union said.

But the government has insisted that there is no going back on its plans to deregulate the downstream sector of the oil and gas industry by withdrawing subsidies on all imported petroleum.

Government insists on deregulation of the market primarily to withdraw billions of Naira trapped in subsidy bills and free up cash for other state functions.

Unions argue that the deregulation policy must be based on increasing local refining capacity by repairing and expanding the existing four refineries.

President of the National Union of Petroleum and Natural Gas Workers (NUPENG) gas consistently argued that the only logical way to deregulate was for government to rehabilitate and expand refining capacity in Nigeria.

"If the government continues to rely on import parity, it will have problems," he said.

While Nigeria is traditionally Africa's biggest oil producer, virtually all of its refined fuel is imported at great cost.