{"title":"Oil price shocks pass-through to domestic prices in Nigeria","authors":"Samuel Orekoya, Oluwatosin Adeniyi, Idris Tijani","doi":"10.1111/opec.12298","DOIUrl":null,"url":null,"abstract":"The study investigated the potential non-linear impacts of fluctuations in oil prices on domestic prices in Nigeria. Utilising the non-linear autoregressive distributed lag (NARDL) model, the study revealed the presence of asymmetry in the behaviour of domestic prices. Both forms of oil price shocks were observed to have a negative influence on domestic prices in the short term, with only positive oil price shocks demonstrating statistical significance. However, in the long run, a distinct pattern emerged where a decrease in oil prices significantly affected domestic prices. Additionally, analysis of VAR impulse response showed a consistently negative reaction of domestic prices to oil price shocks, falling below the steady-state equilibrium. The study concluded that changes in oil prices, in conjunction with other macroeconomic variables, affected the prices of domestic goods in Nigeria, whether in the short or long term. This underscored the complexity of Nigeria's economic landscape. Consequently, it is advisable to prudently invest excess revenue generated from rising oil prices to mitigate the adverse impacts of negative oil shocks on the economy.","PeriodicalId":44992,"journal":{"name":"OPEC Energy Review","volume":"11 1","pages":""},"PeriodicalIF":1.5000,"publicationDate":"2024-02-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"OPEC Energy Review","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1111/opec.12298","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
The study investigated the potential non-linear impacts of fluctuations in oil prices on domestic prices in Nigeria. Utilising the non-linear autoregressive distributed lag (NARDL) model, the study revealed the presence of asymmetry in the behaviour of domestic prices. Both forms of oil price shocks were observed to have a negative influence on domestic prices in the short term, with only positive oil price shocks demonstrating statistical significance. However, in the long run, a distinct pattern emerged where a decrease in oil prices significantly affected domestic prices. Additionally, analysis of VAR impulse response showed a consistently negative reaction of domestic prices to oil price shocks, falling below the steady-state equilibrium. The study concluded that changes in oil prices, in conjunction with other macroeconomic variables, affected the prices of domestic goods in Nigeria, whether in the short or long term. This underscored the complexity of Nigeria's economic landscape. Consequently, it is advisable to prudently invest excess revenue generated from rising oil prices to mitigate the adverse impacts of negative oil shocks on the economy.
本研究调查了石油价格波动对尼日利亚国内价格的潜在非线性影响。研究利用非线性自回归分布滞后(NARDL)模型,揭示了国内价格行为中存在的非对称性。据观察,两种形式的石油价格冲击在短期内都对国内价格产生了负面影响,只有正的石油价格冲击在统计上具有显著性。然而,从长期来看,出现了一种明显的模式,即石油价格的下降对国内价格产生了重大影响。此外,对 VAR 脉冲响应的分析表明,国内价格对石油价格冲击的反应持续为负,低于稳态均衡。研究得出结论,石油价格的变化与其他宏观经济变量一起,影响着尼日利亚国内商品的价格,无论是短期还是长期。这凸显了尼日利亚经济格局的复杂性。因此,最好对石油价格上涨带来的超额收入进行谨慎投资,以减轻石油冲击对经济的不利影响。