Effect of Changes in Petroleum Products Prices on Human Welfare in Nigeria: 1992 – 2022

Abstract

This study examined the effect of changes in petroleum products prices on human
welfare in Nigeria using secondary data from 1992 and 2022. The work aims at
assessing the effect of changes in the petroleum products prices on human welfare
in Nigeria. Unit Root Test and Auto Regressive Distributed Lag (ARDL) bound
test were employed to examine the objectives and inferences were made at 5%
significant level. To wholly conceptualize human welfare, this study used
Household Consumption, Life Expectancy Ratio and Human Development Index
as its measure which is one of the value-addition the work has introduced in this
regard. The findings from ARDL results on the model of changes in petroleum
products prices on household consumption revealed that the effect of changes in
inflation rate and GDP per capita on household consumption in Nigeria is
positive and significant. Second, the long run effect of model on changes in
petroleum products prices and life expectancy rate showed that the effects of
changes in DPK and inflation rate were positive and statistically significant while
the effect of changes in interest rate is negative and statistically significant.
Lastly, on the model of changes in petroleum products prices and human
development index, the long run result revealed that the effect of changes in DPK,
changes in inflation rate and changes in interest rate on human development
index were positive and statistically significant but only the changes in inflation
rate was positive and statistically significant on human development index in the
short run.