Asymmetric Effects of Natural Gas Consumption by GENCOs on the Nigerian Economy: A Nonlinear ARDL Approach

Ohabuenyi Edwin Onah, Ijeoma Emele Kalu and Osokogwu Uche
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Ohabuenyi Edwin Onah: Emerald Energy Institute, University of Port Harcourt, Nigeria
Ijeoma Emele Kalu: Department of Economics, University of Port Harcourt, Nigeria
Osokogwu Uche: Department of Gas Engineering, University of Port Harcourt, Nigeria

International Journal of Latest Technology in Engineering, Management & Applied Science, 2024, vol. 13, issue 12, 331-348

Abstract: This research article examined the correlation between natural gas usage by power generation firms and economic growth in Nigeria. The study analyzed many factors, including liquefied petroleum gas usage, industrial gas consumption, and gas consumption for electricity production, and their effects on gross domestic product (GDP). Data on a quarterly basis from 2010 to 2020, sourced from reputable entities such as the Central Bank of Nigeria, Gas Exporting Countries Forum, and the United Nations, were employed for the analysis. The study investigation utilized the Nonlinear Autoregressive Distributed Lag (NARDL) approach. The results indicated that gas usage substantially affected Nigeria's GDP in short term and long run. The research indicated that a 1% growth in gas utilization by electric power plants and LPG usage positively correlated with a 1.04% and 16.64% rise in Nigeria's GDP, respectively. A 1% reduction in industrial gas usage would result in a 19.95% decline in Nigeria's GDP. The findings demonstrated that augmenting gas use in power generating influenced the GDP. Based on the study, it is advised that the Nigerian government undertake steps to increase the consumption of LPG and natural gas for industrial applications and electricity generation to foster economic growth.

Date: 2024
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