JOURNAL OF AGRICULTURAL EXTENSION AND RURAL ECONOMICS
Integrity Research Journals
Model: Open Access/Peer Reviewed
DOI: 10.31248/JAERE
Start Year: 2024
Email: jaere@integrityresjournals.org
Effect of petrol motor spirit price volatility on agricultural production in Nigeria between 1990-2022
https://doi.org/10.31248/JAERE2025.014 | Article Number: 5BDBAB233 | Vol.2 (2) - April 2025
Received Date: 28 January 2025 | Accepted Date: 07 April 2025 | Published Date: 30 April 2025
Authors: Olagunju, I. O.* , Owolabi, J. O. , Abali, O. and Chikezie, J. C.
Keywords: effect, Agricultural production, capital input, growth pattern, petrol motor spirit.
The study analysed the effect of PMS price volatility on agricultural production in Nigeria between 1990 and 2022. Secondary sourced data was used for the study. Data obtained was analysed using descriptive statistics, trend analysis and impulse response. The socioeconomic analysis of the variables in the research region provides important insights into the dynamics of agricultural output. Total production exhibits a high mean (18.98690), suggesting substantial average production. However, the wide standard deviation (0.340278) implies fluctuations beyond fuel prices, involving climate, technology, and policy changes. Also, the growth pattern of fuel prices on agricultural production in Nigeria, analysed through linear trend analysis, reveals a positive growth trend between 1990-2022. The result also shows that the impulse response analysis of fuel prices on agricultural production highlights immediate negative responses across all variables following a shock. Labour and capital inputs exhibit contrasting responses over subsequent periods. Based on this, this research concluded that the socio-economic analysis uncovered significant insights into the dynamics of agricultural production within the study. Policymakers must recognise the impact of increased fuel prices as it is intertwined with variables such as climate, technology, and policy changes. Also, to mitigate the immediate negative responses observed following fuel price shocks, stakeholders are advised to implement risk mitigation strategies.
| Abayomi, Y. (1992). Statistical analysis of cointegration vectors. Journal of Economic Dynamics and Control, 12(2-3), 231-251. https://doi.org/10.1016/0165-1889(88)90041-3 |
||||
| Adenekan, A. T., Hilili, M. J. & Okereke, A. N. (2020). Oil price, exchange rate and stock market performance in Nigeria. Central Bank of Nigeria Economic and Financial Review, 58(4), 63-103. | ||||
| Adenikinju, F., Gordon, D. V., & Hannesson, R. (2012). Tests for market integration and the law of one price: The market for whitefish in France. Marine Resources Economics, 19, 195-210. https://doi.org/10.1086/mre.19.2.42629428 |
||||
| Adeoti, A., Adewumi, M., & Olatunji, G. (2017). Impact of fuel price on agricultural production in Nigeria. European Journal of Agriculture and Forestry Research, 5(3), 12-18. | ||||
| Agro-Ind. (2002). Statistical analysis of cointegration vectors. Journal of Economic Dynamics and Control, 12(2-3), 231-251. https://doi.org/10.1016/0165-1889(88)90041-3 |
||||
| Aigbedion, I., & Iyayi, F. (2007). The Implications of Fuel Price Increases on Agricultural Production in Nigeria. Journal of Agricultural and Crop Research, 7(3), 36-43. | ||||
| Ajao, A., Oluwajuyitan, D. S., & Yerima, S. A. (2020). Fuel price variability and its impacts on Nigerian agricultural output. Journal of Economics, Management, and Trade, 26(11), 47-59. | ||||
| Alghalith, M. (2010). The interaction between food prices and oil prices. Energy Economics, 32(6), 1520-1522. https://doi.org/10.1016/j.eneco.2010.08.012 |
||||
| Amusan, L., Olutola, O., & Ogunniyi, A. (2021). Fuel price shocks and smallholder farming in Nigeria. Journal of Agricultural Economics and Rural Development, 8(2), 45-60. | ||||
| Ayadi, O. F. (2005). Oil price fluctuations and the Nigerian economy. OPEC Review. Pp. 199-217. https://doi.org/10.1111/j.0277-0180.2005.00151.x |
||||
| Babalola, A., & Salau, T. (2020). Petroleum pump price and consumer price index in Nigeria: A Case for or against total subsidy removal - panel dynamic analysis. Timisoara Journal of Economics and Business, 13(2), 107-128. | ||||
| Baumeister, C., & Kilian, L. (2013). Do oil price increases cause higher food prices? Bank of Canada Working Paper, No. 2013-52. Ottawa: Bank of Canada. | ||||
| Busayo, T. O., Olusanya, E. O., Adeola, A., & Olalekan, J. A. (2019). A panel data analysis of renewable energy consumption in Africa. Renewable Energy, 140, 668-679. https://doi.org/10.1016/j.renene.2019.02.061 |
||||
| Central Bank of Nigeria (CBN) (2021). Annual Economic Report. Retrieved from https://www.cbn.gov.ng/Out/2023/RSD/ 2021%20CBN%20ANNUAL%20ECONOMIC%20REPORT.a.pdf | ||||
| Chen, D., Gummi, U. M., Lu, S. B., & Mu'azu, A. (2020). Modelling the impact of oil price fluctuations on food price in high and low-income oil exporting countries. Czech Academy of Agricultural Science Journals, 66(10), 458-468. https://doi.org/10.17221/197/2020-AGRICECON |
||||
| Daramola, A. (2004). Statistical analysis of cointegration vectors. Journal of Economic Dynamics and Control, 12(2-3), 231-251. https://doi.org/10.1016/0165-1889(88)90041-3 |
||||
| Dillon, B. M., & Barrett, C. B. (2016). Global oil prices and local food prices: Evidence from East Africa. American Journal of Agricultural Economics, 98(1), 154-171. https://doi.org/10.1093/ajae/aav040 |
||||
| Efayena, O. O., Buzugbe, P. N., & Olele, E. H. (2019). Petroleum production and consumption pattern in Nigeria. Journal of Economics and Allied Research, 3(2), 18-30. | ||||
| Enders, W. (2008). Applied econometric time series. Hoboken, New Jersey: John Wiley and Sons. | ||||
| Food and Agriculture Organization (FAO) (2005). The state of food and agriculture. Food and Agriculture Organization of the United Nations. | ||||
| Gardebroek, C., & Hernandez, M. A. (2013). Do energy prices stimulate food price volatility? Examining volatility transmission between US oil, ethanol and corn markets. Energy Economics, 40, 119-129. https://doi.org/10.1016/j.eneco.2013.06.013 |
||||
| Gilbert, C. L. (2010). How to understand high food prices. Journal of Agricultural Economics, 61, 398-425 https://doi.org/10.1111/j.1477-9552.2010.00248.x |
||||
| Gummi, U. M., Rong, Y., Bello, U., Umar, A. S., & Mu'azu, A. (2021). On the analysis of food and oil markets in Nigeria: What prices tell us from asymmetric and partial structural change modeling? International Journal of Energy Economics and Policy, 11(1), 52-64. https://doi.org/10.32479/ijeep.10299 |
||||
| Ikuemonisan, E., Ajibefun, I., & Mafimisebi, T. E (2019). Food price volatility effect of exchange rate volatility in Nigeria. Review of Innovation and Competitiveness, 4(4), 23- 52. https://doi.org/10.32728/ric.2018.44/2 |
||||
| Matthias, K., von Brau, J. (eds.). Food price volatility and its implications for food security and policy. Switzerland: Springer International Publishing AG. p. 457. | ||||
| National Bureau of Statistics (NBS) (2022). Premium motor spirit (petrol) price watch. Retrieved from https://www.nigerianstat.gov.ng/elibrary/read/1241103. | ||||
| National Population Commission (NPC) (2006). Demographics and ethnic diversity in Nigeria. 123 Publications. | ||||
| Ogunniyi, A., Oladejo, J., & Adeyemi, O. (2020). Impact of fuel price increases on agricultural production in Nigeria. African Journal of Sustainable Development, 10(1), 112-130. | ||||
| Olagunju, I. O., Ogah, O. M. and Ali, A. (2022). Responses of rice output to monetary policy shock in Nigeria from 1981-2020. Journal of Agripreneurship and Sustainable Development (JASD). 5(3), 91-101. https://doi.org/10.59331/jasd.v5i3.338 |
||||
| Olayide, O. E., Tetteh, I. K., & Popoola, L. (2016). Differential impacts of global oil price shocks on Nigerian agricultural sector. Energy Economics, 57, 28-36. | ||||
| Olayinka, S. O., & Salim, M. R. (2020). Energy Use Efficiency and Farm Productivity in Nigerian Agriculture. Energy Reports, 6, 1423-1433. | ||||
| Onumadu, F. N., Orji, I. J., & Okoro, A. C. (2019). The Implications of Fuel Price Increases on Agricultural Production in Nigeria. Journal of Agricultural and Crop Research, 7(3), 36-43. | ||||
| Pearson, K. (1900). On the criterion that a given system of deviations from the probable in the case of a correlated system of variables is such that it can be reasonably supposed to have arisen from random sampling. Philosophical Magazine, 50(302), 157-175. https://doi.org/10.1080/14786440009463897 |
||||
| Rashid, S. (2007). Food price stabilization policies in a globalizing world. Case study 6-8 of the program: Food Policy for Developing Countries: The role of Government in the Global Food System. Ithaca: Cornell University. | ||||
| Republic of Kenya (2006). Energy Act, 2006. Nairobi: Government Printers. | ||||
| Sambo, S. (2005), Market liberalization and integration of maize markets in Malawi. Agricultural Economics, 11, 311-324 https://doi.org/10.1016/0169-5150(94)00005-0 |
||||
| Tyner, W. E. (2010). The integration of energy and agricultural markets. Agricultural Economics, 41(1), 193-201. https://doi.org/10.1111/j.1574-0862.2010.00500.x |
||||
| World Bank (2022). Nigeria development update: Agriculture and economic diversification. World Bank. Retrieved from https://www.worldbank.org/en/country/nigeria/publication/nigeria-development-update-ndu. https://doi.org/10.1596/37315 |
||||
Copyright © 2025 Integrity Research Journals. All rights reserved.