Trade in Nigeria's Petroleum Products Market: Theoretical Base for Oil Subsidy Removal Policy
Okafor, S.O.(2014). Trade in Nigeria’s petroleum products market: Theoretical base for oil subsidy removal policy. Nigerian Journal of Energy and Environment, 6(1):77-90.
14 Pages Posted: 6 Jul 2016
Date Written: July 4, 2014
This article focused on detailed analysis Of trade transactions within Nigeria's petroleum products market. It was aimed at developing theses which could be constituted into vibrant theoretical framework to support oil subsidy removal policy of the federal government. Study was designed as a descriptive survey. Data were sourced from National Bureau of Statistics, Nigerian National Petroleum Corporation and Central Bank Of Nigeria. Data were analyzed using partial correlation and time series component Of trend. Results indicate that: (1) There was a significant inverse relationship between demand and price of petroleum products (2) Trade on AGO tended towards market pricing system (3) DPK Was more readily available during partial subsidy regime only at higher price than it was available during partial privatization regime (4) Trade on DPK tended towards market pricing system (5) PMS was more readily available at lower price during partial privatization regime than it was available at higher price during partial subsidy regime (6) Rise in price Of PMS accompanied by a corresponding rise in its demand revealed PMS as pseudo-giffen good. Based on these findings, it was recommended, inter alias that FG should embark on total oil subsidy removal in order to subject petroleum products to market pricing system for adequate supply Of AGO, DPK and PMS at competitive prices.
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