EFFECT OF NIGERIAN DEREGULATION AND DOWNSTREAM SECTOR POLICY ON PETROLEUM (PMS) PRICE: A COMPARATIVE MODEL ANALYSIS

Abstract

ABSTRACT

This research work on the effect of Nigerian deregulation and downstream sector policy on petroleum (PMS) price: A comparative model analysis, examines the impact of deregulation and downstream sector policy on petroleum prices in Nigeria. Using a dataset of monthly PMS prices from 1985 to 2023 obtained from the Central Bank of Nigeria and National Bureau of Statistics, this research employs a qualitative approach. Methodologies include trend analysis, Augmented Dickey-Fuller test, Canova-Hansen test, and Hurst Exponent procedure. The study identifies the Seasonal Autoregressive Fractionally Integrated Moving Average (SARFIMA) model as the most suitable for forecasting PMS prices. The results reveal a significant upward trend in PMS prices, with notable seasonal patterns. The SARFIMA(1,2,1)×(0,1,1)12 model emerges as the best-performing model, capturing the underlying data patterns and providing accurate forecasts. The study concludes that deregulation and downstream sector policy have significant impacts on PMS prices in Nigeria. The findings have important implications for economic planning, fuel price regulation, and energy policy formulation.

Keywords: PMS price, deregulation, downstream sector policy.