AN ASSESSMENT OF THE DOMESTIC DEMAND FOR PETROLEUM PRODUCTS IN NIGERIA (1986
The contribution of petroleum industry to the Nigerian economy since 1970 has been tremendous. The oil industry is very important to the Nigerian economy, it provides, among other things, the greater part of the foreign exchange and total revenue needed for the socio-economic and political development of the country. The bulk of Nigerian crude oil is sold unrefined. When refined, the products range from petrol to heavy liquids for road tarring. The bulk of petroleum products consumption has been the premium motor spirit (PMS) or petrol, automotive gas oil (AGO) or diesel. and dual purpose kerosene (DPK) has been the main thrust of this study. The main focus of the study is to examine the trends of PMS. AGO and DPK and the factors that influence the domestic demand for petroleum products in Nigeria from 1986 2004. The study utilized the ordinary least square technique in investigating the factors that affect the domestic demand for PMS. AGO and DPK in Nigeria. Three sets of equations for each model were specified and estimated i.e. 1970 -1985 (pre-oil regulation). 1986-2004 (during oil regulation) and for the entire period of analysis 1970 – 2004. This was with a view to identify the impact of these factors on domestic demand lor PMS. AGO and DPK. Moreso. empirical investigation was carried out in Zaria from population of 100 consumers of PMS. AGO and DPK to buttress the regression result as to what factors influences their demand for the products. The findings of the regression result reveals that on the overall, price and income have no significant impact on PMS from 1970-2004. Likewise, price have no significant xvi impact on demand for AGO, while per capita income has significant impact on the consumption of AGO from 1970-2004. Moreso. price have no significant impact on domestic demand for DPK while per capita income reveals significant impact on the consumption of DPK from 1970 2004. The result of primary data reveals that uses of PMS. AGO and DPK have a significant impact on domestic demand for petroleum products in Nigeria couple with other composite factors such as price and uses, income and uses/revenue and uses. Therefore, to enhance effective demand for petroleum products in Nigeria, the stud) suggested among others appropriate pricing of petroleum products based on market forces, the over hauling of the refineries and more participation of indigenous marketers on the supply and effective distribution of petroleum products in Nigeria.
AN ASSESSMENT OF THE DOMESTIC DEMAND FOR PETROLEUM PRODUCTS IN NIGERIA (1986 – 2004)