IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF SOCIAL SCIENCES AND MANAGEMENT RESEARCH (IJSSMR )

E-ISSN 2545-5303
P-ISSN 2695-2203
VOL. 10 NO. 9 2024
DOI: 10.56201/ijssmr.v10.no9.2024.pg219.233

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Petroleum Products’ Prices and Standard of Living in Nigeria: Multi–regression model Approaches

Alhassan M. A., Nura, M., Alhassan Shuaibu Yaman

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Abstract

The study analyse the effects of the prices of refined petroleum products like Premium Motor Sprit (PMS), Automotive Gas Oil (AGO) and Dual Purpose Kerosene (DPK) on living standard in Nigeria for the period of thirty–eight years leaning on secondary data from 1986 to 2023. The living standard is disaggregated into its components like income, health and education and the times series data for the said variables were sourced from National Bureau of Statistics and World Bank Development Indicator. Upon determination of the stochastic properties of the series using KPSS, the Auto–Regressive Distributed Lag models and OLS regression technique was utilized to examine the magnitude of the effects of the prices of refined petroleum products on living standard in Nigeria. The study found the presence of long–run relationship between the prices of refined petroleum product and living standard in Nigeria. Also the study revealed that, the price of PMS exerts positive effect on income; the price of AGO negatively affects healthcare expenditure in Nigeria and the price of DPK effect the consumption expenditure negatively in Nigeria. The study therefore, recommends among others that, the price of refined product of petroleum like PMS, DPK and AGO be left wholly to the market forces to determine; the federal government of Nigeria should ensure the total quantity of PMS and AGO required for local consumption be refined locally. This would reduce the burdens of unfavourable exchange rate on the importation of refined PMS, DPK and AGO into the country.

keywords:

A Multi Regression Models: ARDL; OLS; Petroleum products’ prices; Standard

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