ProjectClue.com We're Ready, Call Us

(+234) 07030248044

Project Topic:

PETROLEUM PUMP PRICE AND INFLATION RATE IN NIGERIA (1981-2015)

Project Information:

 Format: MS WORD ::   Chapters: 1 - 5 ::   Pages: 78 ::   Attributes: Data Analysis, Secondary Data, Abstract  ::   25 people found this useful

Project Department:

ECONOMICS UNDERGRADUATE PROJECT TOPICS, RESEARCH WORKS AND MATERIALS

Project Body:

CHAPTER ONE

INTRODUCTION

1.1. BACKGROUND OF THE STUDY

Nigeria is richly blessed with natural resources of which crude oil products play a key role. On the domestic economy, the petroleum sector generates over 90% of the country’s foreign exchange earnings, and provides employment in various forms to Nigerians citizens. Nigerian Government has been the custodian of petroleum and its products. Though, this brought a temporary growth in the economy, the price instability of the crude oil in the world market has led to the downfall of Nigerians economy in various sectors, such as the production, manufacturing and services sectors. The earnings from the oil have influenced significantly Nigeria’s international relations, and sometimes the politics of oil has taken centre stage in the nation’s history of international relations in the last few decades. Petroleum products are derived from crude oil and they include petrol, diesel, kerosene, natural gas, bitumen etc. The origin of the persistent rise in prices of goods and services can be traced to government and its use of the oil revenue. Evidence has shown that petroleum export earns valuable foreign exchange to Nigeria. Indeed, the occasional petrol shortages experienced by Nigerian due to inefficient distribution, which is as a result of incompetence and corruption on the part of bureaucrats and the business class. However, the persistent instability of crude oil prices in the global market has been revealed to have adversely affected macroeconomic performance of the Nigerian economy (Mba-Afolabi, 2008; Labys, 2006; Nwosu, 2009; Arinze, 2011; Runl, 2011; Bobai, 2012) owing to the fact that Nigeria is a monoculture economy which is heavily depending on crude oil export for its foreign earnings. Crude oil price instability has been found to affect production cost of foreign firms and since Nigeria is import dependent, an increase in crude oil prices makes imported goods to be very expensive which in turn is transmitted to domestic prices by raising the general price level. The upward review of domestic prices of petroleum products was necessitated by the high spot market price of crude oil and the need for higher margins for the Nigerian National Petroleum Corporation (NNPC) to meet operational and capital costs. Petroleum pump prices in the domestic market have been under governments control since 1973 when it was handed over from the private oil companies (Iwayemi, 1993). The prices of petroleum products in Nigeria should theoretically be derived from International Crude oil prices since the marginal supply (litres) comes from import, it should therefore reflect import price. In other words, when the marginal unit of consumption is imported, the economic price should be import parity price. Government of both oil producing and consuming countries invariably intervene in the market to influence product price. The extent of such intervention depends on the specific needs of the country and importance of the product in question. It has also been noted that crude oil cost is not the only cost incurred in the supply and distribution of petroleum products as other costs such as refining costs, transportation and distribution costs are involved. In other OPEC countries the growth rate of the money supply has been generally high, the recent growth rates of money supply in Nigeria is alarming. The alarming rate of money supply is influenced by the earnings from petroleum (Osagie 2007).

1.2. STATEMENT OF THE PROBLEM

The changes in prices of petroleum products have resulted in inflation, high cost of living, and inequitable distribution of income in Nigeria. The high cost of full price has paralyzed social and economic activities in Nigeria and as a result, there has been a noticeable hike in prices of commodities and products in markets. Most of the increase made petroleum products prices to be adjusted upwards sometimes twice in one year. One major problem this has caused was the instability of the prices of goods and services in the country. Transporters on their part complained that getting their tanks filled in the face of fuel scarcity is very difficult as at times their vehicles are abandoned at the filling stations for days. At other times they have to patronize the black market at a very high cost which leads to a corresponding higher transportation costs. The problem also affects civil servants, businessmen, students and lecturers adversely. Inflation, the condition of a continually rising price level, has become a major concern of politicians and the public, and how to control it frequently dominates the discussion on economic policy. It is therefore on this backdrop that the researcher wants to examine petroleum pump price and inflation rate, enumerated problems as a result of fuel price increase on Nigerian economy.

1.3 AIMS OF THE STUDY

The major purpose of this study is to examine petroleum pump price and inflation rate in Nigeria. Other general objectives of the study are:

  1. To examine how adverse price instability of petroleum in Nigeria.
  2. To examine the implications of pump price of petroleum on food security in Nigeria.
  3. To examine the effects of petroleum pump price increase on the Nigerian economy.
  4. To examine the impact on changes in petroleum products prices on inflation in Nigeria.
  5. To examine the relationship between petroleum pump price and inflation rate in Nigeria.

6. To recommend roles government should play in petroleum products’ price determination.

1.4 RESEARCH QUESTIONS

  1. How does adverse price instability of petroleum impacted inflation in Nigeria?
  2. What are the implications of pump price of petroleum on food security in Nigeria?
  3. What are the effects of petroleum pump price increase on the Nigerian economy?
  4. What are the impacts on changes in petroleum products prices on inflation in Nigeria?
  5. What is the relationship between petroleum pump price and inflation rate in Nigeria?

6. What are the roles government should play in petroleum products’ price determination?

1.5 RESEARCH HYPOTHESIS

H0: There is no significant relationship between petroleum pump price and inflation rate in Nigeria.

H1: There is a significant relationship between petroleum pump price and inflation rate in Nigeria.

1.6 SIGNIFICANCE OF THE STUDY

This study is significant in that it will fit a model that predicts the Nigerian economy given petroleum product prices. This model will be useful in planning the Nigerian economy by channelling the revenue generated from petroleum to those areas that the impact of the petroleum revenue has not been felt. This research will be a good resource in planning how to utilize the excess revenue that will result in the imminent increase in the demand for petroleum products as a result of population explosion and technological breakthrough.  Many people will benefit from this research; both the young and the old will gain a lot of things from this work.

1.7    SCOPE OF THE STUDY 

The study is based on petroleum pump price and inflation rate in Nigeria (1981-2015).

1.8 LIMITATION OF STUDY

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.9 DEFINITION OF TERMS

Petroleum: Literally 'rock oil,' it is a general term for crude oil and natural gas. Primary source of automotive fuels and lubricant oils, petroleum is a complex mixture of hydrocarbons and paraffin’s in some areas, and aromatics and cyclo-paraffins in other areas.

Price:  Is a value that will purchase a finite quantity, weight, or other measure of a good or service. It’s the consideration given in exchange for transfer of ownership, price forms the essential basis of commercial transactions. It may be fixed by a contract, left to be determined by an agreed upon formula at a future date, or discovered or negotiated during the course of dealings between the parties involved.

Inflation rate: This measurement is influenced by how high or low the prices of goods and services move throughout the economy.

Get the complete project »

Instant Share On Social Media:

OTHER SIMILAR ECONOMICS PROJECTS AND MATERIALS

IMPACT OF GOVERNMENT EXPENDITURE ON ECONOMIC GROWTH IN NIGERIA CHAPTER ONE

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 71 ::   Attributes: Secondary data, Data Analysis,Abstract  ::   5801 engagements

CHAPTER ONE INTRODUCTION 1.1. Background of the study Government Expenditure no doubt is an important instrument for a government to control the economy of a nation. Economists have been well aware...Continue reading »

IMPACT OF MACROECONOMICS VARIABLES ON FIRMS’ PERFORMANCE IN NIGERIA

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 59 ::   Attributes: Secondary data, Data Analysis, Abstract  ::   3012 engagements

CHAPTER ONE INTRODUCTION 1.1. Background of the study Every company operates within the internal and external environments of business. The internal environments are within a firm such that the pre...Continue reading »

IMPLICATION OF TREASURY SINGLE ACCOUNT ON BANKING SECTOR OF NIGERIA AND THE ECONOMY AS A WHOLE

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 76 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   5654 engagements

CHAPTER ONE INTRODUCTION 1.1 BACKGROUND TO THE STUDY Treasury Single Account is a public accounting system under which all government revenue, receipts and income and collected into one single acco...Continue reading »

TAXATION AS A TOOL FOR ECONOMIC DEVELOPMENT OF NIGERIA

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 71 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   2858 engagements

CHAPTER ONE INTRODUCTION 1.1 BACKGROUND OF THE STUDY Nigeria as a nation has the vision of becoming one among the world’s 20 largest economies in the year 2020; this obviously is the brain beh...Continue reading »

THE IMPACT OF COMPANY INCOME TAX REVENUE ON THE DEVELOPING ECONOMIES: THE NIGERIA EXPERIENCE

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 67 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   1584 engagements

The article on this topic (impact of company income tax revenue on the developing economies) is an extract from literature review of the project material. The complete project work would be made avail...Continue reading »

THE IMPACT OF TAX ON GOVERNMENT CAPITAL EXPENDITURE AND ECONOMIC GROWTH IN NIGERIA

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 65 ::   Attributes: Secondary data, Data Analysis,Abstract  ::   2444 engagements

The article on this topic (impact of tax on government capital expenditure and economic growth in Nigeria) is an extract from literature review of the project material. The complete project work would...Continue reading »

What are looking for today?

WHAT OUR CUSTOMERS ARE SAYING:
  • 1. Ibrahim from BUK said "very nice".
    Rating: Excellent
  • 2. Vitar from University of Port Harcourt said "I had a wonderful experience using ProjectClue, they delivered not only on time, but the content had good qualty. I recommend ProjectClue for any project research work.".
    Rating: Very Good
  • 3. Faraz Hussain from University of Abuja said "This is a great help for those who seek education. May our Lord Almighty ALLAH bless you projectclue.com who brought this wonderful page and may he bless us (education seekers) too.".
    Rating: Excellent
  • 4. Melkamu from D /Markos said "very good".
    Rating: Good
  • 5. Gabriel Etim from Unical said "Tnks to u guys(projectclue.com) for initiating trust bond with ur clients, especially me. Project clue is an epitome of trust, integrity, sincerity and class. God bless you all.".
    Rating: Very Good
  • 6. Shadack Kiilu Wambua from the kenya insititute of management said "this site was so much helpful since i have acquired alot of experience and exposure at the same time. thanks alot to this site anyway".
    Rating: Very Good

Leave a comment: