Empirical analysis of the demand for petroleum products in Nigeria

Abstract

The paper identifies the various variables in the consumption framework for policy simulation purposes regarding energy planning in the country. Elasticities were also estimated for proportions of GOP contributed by agriculture, manufacturing and seNices. The empirical findings reveal that urbanisation was one of the principal factors that has a positive impact on the consumption of liquified petroleum gas and premium motor spirit. The impact of urbanisation on the consumption of household kerosene is negative, showing that kerosene is not urbai"lisation elastic. The policy implications of the findings include the need to keep track of the proportion of the population moving into the urban centres, and the relative shift in the importance of the major sectors of the economy. These were significant in the estimation of the demand for petroleum products.