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Journal of Empirical Studies

June 2021, Volume 8, 1, pp 25-35

Do Petroleum Product Pump Prices Influence Economic Growth in Nigeria? An Empirical Analysis

Jude Chukwunyere Iwuoha

,

Florence Chigozirim Awoke

,

Chiwuike Ubah

Jude Chukwunyere Iwuoha 1 ,

Florence Chigozirim Awoke 2
Chiwuike Ubah 1 
  1. Department of Economics, Enugu State University of Science and Technology, Nigeria. 1

  2. Department of Economics, Ebonyi State College of Education, Ikwo, Nigeria. 2

Pages: 25-35

DOI: 10.18488/journal.66.2021.81.25.35

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Article History:

Received: 04 August, 2021
Revised: 08 September, 2021
Accepted: 24 September, 2021
Published: 18 October, 2021


Abstract:

This study examined the impact of fuel pump price adjustment and the causal relationship between fuel pump price adjustments and economic growth in Nigeria using secondary data extracted from the Central Bank of Nigeria annual report and National Bureau of Statistics publications spanning from 1980 - 2019. Descriptive statistics, unit root test, Johansen cointegration test, VECM and Granger causality test were employed to analyse the data. The result showed that a 1% increase in the prices of PMS and AGO increased economic growth by 0.014%, 0.038% and 0.018% respectively while AGO is reduced by 0.002%. Also the prices of PMS, AGO and DPK does not granger cause economic growth in Nigeria within the period under this study meaning that any macroeconomic policy that affects economic growth should be pursued independent of fuel pump prices as any policy aimed at influencing economic growth through pump price adjustments seems to be ineffective.
Contribution/ Originality
This study is one of very few studies which have investigated the impact of fuel price adjustments on Nigeria’s economic growth, with data covering various government regimes up to 2020. The linear model allowed us to introduce an index called index of labour input proxied by exchange rate – EXR.

Keywords:

Premium motor spirit, Dual purpose kerosene, Automotive gas oil, Economic growth, Petrol pump price, Economic growth, Pump price adjustment.

Reference:


Statistics:

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Funding:

This study received no specific financial support.

Competing Interests:

The authors declare that they have no competing interests.

Acknowledgement:

All authors contributed equally to the conception and design of the study.

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