Oil Price Shocks and Energy Consumption in Nigeria

Patricia Iyore Ajayi (), Adedayo Emmanuel Longe (), Oladayo Ayokunle Omitogun () and Shehu Muhammad ()
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Patricia Iyore Ajayi: Department of Economics, University of Ibadan, Nigeria
Adedayo Emmanuel Longe: Centre for Petroleum, Energy Economics and Law (CPEEL), University of Ibadan, Nigeria
Oladayo Ayokunle Omitogun: Centre for Petroleum, Energy Economics and Law (CPEEL), University of Ibadan, Nigeria
Shehu Muhammad: Department of Social Science, Federal Polytechnic, Bida, Niger State, Nigeria

Business & Management Compass, 2019, issue 4, 275-293

Abstract: The study investigates the impact of oil price shocks on energy consumption in Nigeria using, Bai-Perron Structural Breaks Test, NARDL approach and VAR model to analyse the data spanning from 1978 through 2016. From the results, in the long and short-run, positive and negative changes in bonny light crude oil price positively impact on energy consumption in Nigeria. The study concludes from these findings that irrespective of changes in the price of oil, oil related energy sources are still considered and this is because of the challenges faced in the development of the country’s energy sector in general. Based on the findings, the study recommends that strategic investment attention should be paid to alternative sources of energy such as the renewables in order to reduce large dependency on oil related energy such as fossil fuels.

Keywords: Oil price; Energy Consumption; Bai Perron; NARDL; VAR Model (search for similar items in EconPapers)
JEL-codes: Q43 Q48 (search for similar items in EconPapers)
Date: 2019
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