Petroleum Products Pricing and Inflation in Nigeria

Golden Enyia; Joseph. I. Onyema; Kelvin. C. Njoku

doi:10.56201/ijebm.vol.12.no3.2026.pg204.217

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Petroleum Products Pricing and Inflation in Nigeria

Golden Enyia, Joseph. I. Onyema, Kelvin. C. Njoku, .

Abstract

This study examines the effect of petroleum products pricing on inflation in Nigeria from 1990 to 2023. Petroleum products pricing was proxied by premium motor spirit price, household kerosene price, natural gas price and automotive gas oil price while inflation was measured by headline inflation. The study made use of annual time series data which were mainly sourced from Central Bank of Nigeria Statistical Bulletin, National Bureau of Statistics Reports, Petroleum Products Pricing Regulatory Agency Report, Nigerian National Petroleum Corporation Report, World Development Indicators of World Bank. The major techniques of data analysis adopted include descriptive statistics, ADF unit root test, bounds cointegration test and ARDL approach. The findings of the study showed that premium motor spirit price, natural gas price and automotive gas oil price have positive and significant effect on headline inflation in Nigeria both in the short and long run while household kerosene price has a positive and insignificant effect on headline inflation in Nigeria both in the short and long run. Based on the findings, the study concluded that petroleum products pricing has a significant positive effect on inflation in Nigeria. The study recommended among others that government should adopt a phased and transparent approach to price adjustments. This should include clearly communicating timelines for subsidy removal or price deregulation, implementing social protection schemes (like transport vouchers or cash transfers), and synchronizing fuel price adjustments with broader macroeconomic stabilization measures.

Keywords

petroleum products pricingpremium motor spiritnatural gasinflationheadline inflation.

References

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Petroleum Products Pricing and Inflation in Nigeria

Abstract

Keywords

References

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