Modeling Petroleum Product Demand in Nigeria Using Structural Time Series Model (STSM) Approach

Aliyu Barde Abdullahi
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Aliyu Barde Abdullahi: Economic Research & Data Management Department, Corporate Planning & Strategy Division of the Nigerian National Petroleum Corporation(NNPC), Corporate Headquarters, Abuja, Nigeria.

International Journal of Energy Economics and Policy, 2014, vol. 4, issue 3, 427-441

Abstract: In this paper, the demand function for five major petroleum products consume in Nigeria namely gasoline, diesel, kerosene, fuel oil, liquefied petroleum gas (LPG) and aggregate was estimated using Structural Time Series Models (STSMs) which accounts for structural changes in energy demand estimation. STSMs incorporate stochastic rather than deterministic trend which is more general and therefore argued to be more appropriate in this study. The results suggest that the demand for petroleum products in Nigeria is both price and income inelastic and the underlying demand trends were generally stochastic in nature. LPG has relatively higher elasticities than the rest of the petroleum products, namely kerosene, gasoline, diesel and fuel oil.

Keywords: Petroleum Product; demand; STSM; Stochastic Trend (search for similar items in EconPapers)
JEL-codes: C32 Q43 Q47 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:2014-03-12

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