Petroleum Pump Price Increase and Business Environment: The Nigerian Economy Standpoint
Journal Title: IOSR journal of Business and Management - Year 2018, Vol 20, Issue 3
Abstract
There have been a lot of theories that explain the impact of petroleum price increase on the business and economic growth of any country, especially Nigeria which has been one of the major oil producing countries in the World. In the past years, oil has become more volatile and has grown worse in the present Nigeria and this has affected balance of payments, oil trade and revenue from oil. This paper empirically examined the influence of price increase on economic growth in Nigeria between the years 1985 – 2015 using ordinary least square (OLS), linear multiple regression model analysis in assessing five key macroeconomic variables. The data were extracted from Central Bank of Nigeria (CBN) statistical bulletin while the overall analysis shows that oil price increase has a relationship with Gross Domestic Product (GDP) and both of them have significant influence on each other. The results further show that oil output, economic openness of oil, oil import and oil export has positive relationship with GDP and consequently the impact on oil revenue is negatively related to real Gross Domestic product. It could be deduced from the foregoing that increase in petroleum pump prices would lead to a decrease in National income because it constitutes a major source of revenue for the government but has a cash withdrawal effect on the business environment and economy. There is, therefore, the need for the government to adopt a more pragmatic economic policies and strategies to revamp the ailing economy. These strategies and policies include liberalization of its economy and thus become oil exporter oriented country; curbing the corruption levels in the governance; investment in infrastructural facilities and finally rehabilitation of all the nation’s moribund refineries to enhance daily operating production capacity of refined crude oil and other related products in the country.
Authors and Affiliations
Ologundudu, Mojeed Muhammed (Ph. D), Abioro, Matthew Adekunle (Ph. D)
Keywords
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- EP ID EP409935
- DOI 10.9790/487X-2003046070.
- Views 69
- Downloads 0
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