Impact of Petroleum Subsidy Removal on Government Expenditure in Nigeria
Journal Title: International Journal of Humanities and Social Science Invention - Year 2018, Vol 6, Issue 12
Abstract
The study investigated the effects of petroleum subsidy removal on government expenditure in Nigeria. The major objective of the study is to examine the impact of subsidized prices of petroleum products on government expenditure in Nigeria. The study used secondary data from 1985 to 2016, sourced from the Central bank 2016 Statistical bulletin. An advanced econometric technique, the Augmented Dickey Fuller (ADF) unit root test, the Engel-Granger co-integration residual test and the error correction model, were employed in data analysis to help in addressing the objectives of the study. Based on the objective of this study, the following findings were made. The result of the study indicates that subsidized price of PMS has a positive significant impact on government expenditure in Nigeria. The study also found that subsidized price of DPK has a negative significant impact on government expenditure in Nigeria; an outcome that is not expected. Lastly, the result of the study indicates that subsidized price of DPK has a positive but no significant impact on government expenditure in Nigeria. On this premises, the study recommends that government should allow the fixing of petroleum prices based on market conditions and channel the amount spent on subsidy to other important sectors of the economy.
Authors and Affiliations
Okereke . , Samuel F.
Keywords
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