FUEL PUMP PRICE MOVEMENT, ECONOMIC GROWTH AND DEVELOPMENT IN NIGERIA

The focus of this paper was on the effects of petroleum price changes on economic growth and development in Nigeria in the period 1980-2025. The specific objectives of the study were to examine the effects of PMS Price increase on inflation, unemployment and GDP. GDP and unemployment were the proxies for economic growth and economic development respectively. The data for the study were pooled from various sources such as National Bureau of Statistics (NBS), CBN Annual Reports and Statistics, economics texts, journals and World Bank data. To estimate the model, the researcher employed Auto-Regressive Distributed Lag models (ARDL) as inferential statistical tool of analysis. With unemployment as a dependent variable the result of the analysis indicated that unemployment in the previous period had significant positive effect on the current level of unemployment in Nigeria. Petrol price increase had significant positive impact on inflation rate in Nigeria. With GDP as a dependent variable and petroleum price and inflation as explanatory variables, the results indicated that Petroleum Pump Price increase had significant negative effect on real GDP in Nigeria. Inflation rate had significant negative effect on real GDP in Nigeria. Implications of the findings: the results from the findings indicated that changes in the price of PMS introduced significant shock to Nigerian economy in terms of increased rise in the costs of business resulting cost push inflation which caused investment dwindle to worsen the level of unemployment. This scenario implied that fiscal policy was not very effective at this time to contain the level of inflation induced by changes in the price of PMS.