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The Impact Of Petroleum Subsidy On The Consumption Of Petroleum Products In Nigeria
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1.4 THE RESEARCH QUESTIONS
The
following research questions would serve as a guide to enable this
project achieves its identical problems solution and objectives. Which
depends mostly on the impact of petroleum subsidy on the petroleum
production and consumption in Nigeria and what government should do in
order to boost stability in the economy via petroleum consumption?
The questions are:
• Has Nigerian government given subsidy on petroleum before?
• What are the impacts of the subsidy on petroleum consumption?
• What are the necessary policy recommendations for economic stabilization via the effect of petroleum subsidy?
1.5 THE STATEMENT OF THE HYPOTHESIS
Based
on the available information and data, this researcher will be able to
test the following hypothesis whether to accept and or reject them. This
gives the researcher the insight to make the decisions and policy
recommendations using a common decisions rules and certain level of
significance. It follows:-
1. Petroleum consumption on the average
does not have a linear relationship with the gross domestic products for
capital and petroleum subsidy. Mathematically:
Ho: b1=b2=0
2.
Petroleum consumption has linear relationship with the gross domestic
product per capital and the petroleum subsidy. Mathematically:
Ho: b1≠b2≠0
1.6 THE SIGNIFICANCE OF THE STUDY
This
work on petroleum subsidy in Nigeria will go a long way to trying to
exposed the problem associated with the petroleum subsidy maintenance
and its removal in the economy.
Meanwhile government, private and
individual household sectors are expected to benefit much from this
work. The firm and the household sectors that form the major consumers
of petroleum products will be able to either or not to appreciate
government intentions to remove the subsidy on petroleum products in
Nigeria.
This work will as well go to show what actually constitute
the petroleum subsidy in Nigeria. It will analyze the cost to the
government if not removed and the welfare of the local consumers. It
will also reveal to a greater extent what effect it has on the GDP of
the economy, at its full sustenance, partly to be taken in the issue of
petroleum subsidy in Nigeria.
1.7 THE SCOPE OF THE STUDY
Based on
the work, references are to be made on the production of petroleum in
Nigeria, with special touch on pricing policy and the marketing strategy
of petroleum. There will be general overview on the concept of subsidy
and cost analysis in the petroleum industry, major elements of and basic
assumptions for, the calculation of crude oil and consumption.
There
will be a general overview of cost-benefit analysis of petroleum
subsidy in Nigeria, particularly, to what effects its withdrawal and
sustenance will have on the economy, influence of structural adjustment
programmed (SAP) on petroleum subsidy, SFEM and subsidy will be
reviewed, the nature of the country without oil will be looked into.
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ABSRACT - [ Total Page(s): 1 ]The petroleum sector is an indispensable body in Nigeria economy. It has remained the Nigerian biggest revenue earner. It still brings in more than 80% of the foreign exchange earned by the country. However, this resulted in the shortage of the quantities of petroleum products consumed locally in the country. Hence, the problem of development is generally faced in Nigeria. This work will as well go to show what actually constitute the petroleum subsidy in Nigeria. It will analyze the cost to the ... Continue reading---
