Natural Gas Consumption and Price Stability in Top Gas-Producing Countries in Africa

Abstract

This study investigated the effects of natural gas consumption on price level in top gas producing countries in Africa namely; Algeria, Angola, Egypt, Gabon, Libya and Nigeria. Natural gas consumption was measured in terms of natural gas used/utilized in the countries domestic economy, price of natural gas and motor gasoline energy consumption of the countries while price level was captured in term of consumer price index (CPI) also of the countries of interest. The Panel Autoregressive and Distributed Lag (PARDL) was used to analyse data sourced after descriptive statistics and panel unit root tests. The results revealed that natural gas consumption had positive and substantial influence on consumer price index or inflation. Natural gas price had negative but insignificant effect on price level while motor gasoline energy consumption had negative and substantial effect on price level (consumer price index) in the top-gas producing African countries. The result also shows that a long run relationship existed between natural gas consumption and price level in the top-gas producing countries in Africa. Based on these results/findings, the study recommended policies that will enhance a stable natural price and domestic refining and consumption of motor gasoline energy in order to stabilize price level in Africa especially the gas producing countries.