Abstract
This study examined the effect of Crude Oil Fluctuation and the Nigerian economy: A resource-dependence approach covering a study period of 35 years (1984-2018). Variables used include Fluctuation in Oil Price per Barrel (FOBP), Diesel Pump Price Fluctuations (PPPF), Petrol Pump Price Fluctuations (DPPF), Kerosene Pump Price Fluctuation (KPPF), and Real GDP. The data were gotten from the CBN Statistical Bulletin, World Bank Report, and Oil Producing Exporting Countries Annual Report while it was analyzed using Auto-Regressive Distributed Lag Model. Various diagnostic tests proved that the model is fit for the study. Accordingly, the trend analysis appears to cast doubts on whether crude oil fluctuation made significant contributions to the Nigerian economy. However, the Pearson correlation coefficient substantially attests to a strong linear relationship between the regressed and the regressors. Particularly, the individual results restated that in the short run only Fluctuation in Oil Price per Barrel (FOBP) improved the Nigerian economy significantly. However, in the long run, both Fluctuation in Oil Price per Barrel (FOBP) and Kerosene Pump Price Fluctuation (KPPF) improve the Nigerian economy significantly. Hence we conclude that, if the Nigerian economy must experience outstanding performance, both the private and public agencies should not interfere in the apex bank surveillance on the excess crude account. More so, the federal government should endeavor to industrialize the Nigerian economy.
Highlights
Crude oil is popularly known as fossil fuel or better still “oil” is a naturally occurring substance that is found in widely differing quantities in different parts of the world
The Independent variable in the study is oil price fluctuation measured by fluctuation in oil price per barrel, Petrol pump price fluctuation, Diesel pump price fluctuation, and Kerosene pump price fluctuation) while the dependent variable in the study is economic growth measured by Real Gross Domestic Product (RGDP)
The conclusion reached from this study is that on the overall, crude oil fluctuation vis-à-vis Fluctuation in Oil Price per Barrel (FOBP), Diesel Pump Price Fluctuations (PPPF), Petrol Pump Price Fluctuations (DPPF), and Kerosene Pump Price Fluctuation (KPPF) exert positive and significant effects on economic performance of Nigeria
Summary
Crude oil is popularly known as fossil fuel or better still “oil” is a naturally occurring substance that is found in widely differing quantities in different parts of the world It does not have any desirable quality in its raw state when it is refined into different products (petroleum motor spirit, diesel fuels, jet fuels, and petroleum gas) it becomes useful. Hopes that the Nigerian economy will gather the strong growth momentum as it was in the early ‘70s are less likely in present times This is because economic growth was driven by the rapid expansion of oil production capacity as well as massive public sector investment in the oil and gas sector. The study will serve as resource material to policy analysts, government agencies, researchers, and the likes
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