IMPACT OF GAS PRICING AND DEMAND ON OUTPUT IN NIGERIA
Binta Yahya
Department of Economics
Adamawa
State University, Damaturu
ABSTRACT
This study examines the effect of natural gas pricing and natural gas demand on National output (GDP) in Nigeria. The interactions between gas demand, gas price and GDP was investigated using the structural vector auto-regressive (SVAR) model. Time series monthly data were collected from 1996 -2016 on gas demand, gas supply, gas retail price, petrol retail price and GDP. The result indicated that gas price has a significant impact on gas demand and gas demand also determines gas pricing; and that gas demand has a significant impact on GDP. Furthermore, the impulse response showed the response of GDP to gas demand to be negative, but positive to gas supply petroleum retail price and gas retail price . The variance decomposition showed that petroleum retail contributed more to changes in GDP followed by gas demand, then gas supply, while gas price contributed least. Findings Suggests that the government should invest in gas infrastructure and enact proper monetisation and utilisation policies that will encourage foreign and local investors so as encourage supply and increase revenue earnings for the government .
