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

Authors

  • Aliyu Barde Abdullahi University of Surrey, UK IAEE NNPC

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 JEL Classifications: C32; Q43; Q47

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Author Biography

Aliyu Barde Abdullahi, University of Surrey, UK IAEE NNPC

A graduate of Energy Economics and Policy, University of Surrey, UK. Currently serving as Energy Analyst at the Corporate Planning and Strategy Division of the Nigerian National Petroleum Corporation, Abuja - Nigeria.

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Published

2014-05-24

How to Cite

Abdullahi, A. B. (2014). Modeling Petroleum Product Demand in Nigeria Using Structural Time Series Model (STSM) Approach. International Journal of Energy Economics and Policy, 4(3), 427–441. Retrieved from https://econjournals.com/index.php/ijeep/article/view/769

Issue

Vol. 4 No. 3 (2014)

Section

Articles

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