Submit your papersSubmit Now
For Enquiries: [email protected]
IIARD LogoIIARD

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

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

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

References

Alhassan, A. M., & Mustafa, D. (2020). Exploring conceptual and theoretical understanding in the study of insecurity and macroeconomic variables in Nigeria. The Journal of Economics and Finance, 4(2), 258–270. Aslam, K. & Lawan, C. (2016). An examination of poverty as the foundation of crisis in northern Nigeria. Insight on Africa, 8(1), 59–71. DOI: 10.1177/0975087815612283 http://ioa.sagepub.com. Bobai, F. D. (2012). An analysis of the relationship between petroleum prices and inflation in Nigeria. International Journal of Business and Commerce, 1(12), 1-7. CBN (2019). Statistical bulletin_public finance statistics_final e_copy. Available on: https://www.cbn.gov.ng/documents/statbulletin.asp. Eregha, B., Mesagan, E. & Ayoola, O. (2015). Petroleum products prices and in?ationary dynamics in Nigeria. Munich Personal Repec Archive–MPRA Paper, 70251, 1–16. Gatawa, N. M. & Zakari, A. (2017). Impact analysis of petroleum product price changes on households’ welfare in Zaria metropolis of Kaduna State–Nigeria. International Journal of Humanities and Social Science Invention, 6(4), 40–49. Gregory, P. & Stuart, R. (2013). The global economy and its economic system. South Western college publication, P. 41. Henry, E. I., Emmanuel, I., Eseosa, O. & Abiola, A. (2020). Petroleum Subsidy Withdrawal, Fuel Price Hikes and the Nigerian Economy. International Journal of Energy Economics and Policy, 10(4), 258-265. Innocent, O., Ogbu, M. & Job M. P. (2015). Global Journal of Interdisciplinary Social Sciences, 4(1), 36–39. Isaac, B. O. & Simon, A. A. (2015). Fuel price hike and vulnerability of households in Nigeria: Empirical evidence from Ibadan metropolis, Oyo State–Nigeria. Journal of Social Sciences, 43(3): 301-309. Isyaka, M. S. (2014). The implications of price changes on petroleum products distribution in Gwagwalada, Abuja–Nigeria. Journal of Energy Technologies and Policy, 4(7), 1–15. Moukhtar, M. I., Alhassan, M. A. & Ahmad, M. (2021). Impact of fertilizer subsidy on maize output in Nigeria: 1987–2019. African Journal of Sustainable Agricultural Development, 2(3), 44–58. Nwaoha, W. C., Onwuka, O. O., Ejem, C. A., Obisike, N. E. & Ogbuewu, K. J. (2018). Movements of petroleum pump prices and standard of living: Evidence from Nigeria. International Journal of Social Sciences and Management Research, 4 (8), 57–67. Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16, 289–326. Roland, N. O. (2017). The impact of domestic pricing of petrol on economic growth of Nigeria (1970 – 2013). Global Journal of Social Sciences, 16, 1 – 8. Rosser, M. V. & Rosser, J. B. (2003). Comparative economics in transforming world economy. MIT press, P. 7. Samuel, D. A., Raymond, O. A. & Ayobola, O. C. (2023). The impact of petroleum product prices on the Nigerian economy. International Journal of Humanities Social Science and Management (IJHSSM), 3( 2), 12 – 20. Sani, B., Ismaila, S. A., Danlami, T., Sani, I. B. & Yusuf, J. A. (2020). Asymmetric impact of oil price on in?ation in Nigeria. CBN Journal of Applied Statistics, 11(2), 85–113. Stephen, I. O. (2015). Impact of fuel price increase on the Nigerian economy. Mediterranean Journal of Social Sciences, 6(1), 560–569. Ukangwa, J. U., Ikechi, V. & Ben, M. O. (2022). Impact of petroleum product pricing on Nigerian economy. Journal of Research in Humanities and Social Science, 10(7), 19 – 30. WDI (2020). World data catalog. World Bank Development Indicator, Washington, DC. Available on: [email protected].

More Articles from INTERNATIONAL JOURNAL OF SOCIAL SCIENCES AND MANAGEMENT RESEARCH

Building National Analytics Capacity: Advances and Future Pathways

Author: Uchechi Mary-Linda Unamma, Ifeanyichukwu Jeffrey Okwesa, Uzoamaka Iwuanyanwu

Root-Cause and Thematic Analysis for Major Incident Management: A Review

Author: Ifeanyichukwu Jeffrey Okwesa, Uchechi Mary-Linda Unamma, Uzoamaka Iwuanyanwu

Data-Quality and Single-Source-Of-Truth Frameworks for Inter- Agency Reporting: A Review

Author: Uchechi Mary-Linda Unamma, Ifeanyichukwu Jeffrey Okwesa, Uzoamaka Iwuanyanwu

Human-In-The-Loop Decision Systems: Advances and Future Directions

Author: Funmilayo Ashore-Onisemo, Uchechi Mary-Linda Unamma, Ifeanyichukwu Jeffrey, Okwesa,

Roles of Oil Subsidy Removal on Transportation Cost and Water Factory in Cross River South, Nigeria

Author: Onwuzurike Peter Tobechi, Owoh Akwa Owoh, Unoh Grace Inyang, Umaru Musa