Premium Motor Spirit (PMS) pricing and inflationary dynamics in Nigeria

Olawale Isaac Wale-Awe; Luqman Adedamola  Sulaiman

doi:10.23762/FSO_VOL8_NO3_3

Published : 2020-09-29

Vol. 8 No. 3 (2020)

Premium Motor Spirit (PMS) pricing and inflationary dynamics in Nigeria

Olawale Isaac Wale-Awe

Luqman Adedamola Sulaiman

DOI: https://doi.org/10.23762/FSO_VOL8_NO3_3

Abstract

The study examines the effect of PMS pricing on inflationary dynamics in Nigeria between 1980 and 2018. Inflation was used as the dependent variable for the study, while the prices of PMS (Premium Motor Spirit, simply called petrol), AGO (Automotive Gas Oil, simply called diesel), and DPK (Dual Purpose Kerosene, simply called kerosene), as well as the exchange rate, were used as independent variables. The study employed the ARDL and causality techniques for analysis. It was discovered in the study that the price of PMS increases inflationary tendencies in the country. Meanwhile, the causality test revealed the absence of causality between PMS pricing and inflationary dynamics in Nigeria. Thus, the study recommended that the government should stabilise the price of PMS and align it with the wage rate.

Keywords:

PMS pricing, crude oil price, inflation, Monetary Authorities

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Wale-Awe, O. I., & Sulaiman, L. A. . (2020). Premium Motor Spirit (PMS) pricing and inflationary dynamics in Nigeria. Forum Scientiae Oeconomia, 8(3), 49–60. https://doi.org/10.23762/FSO_VOL8_NO3_3

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Olawale Isaac Wale-Awe

olisawe@gmail.com

Affiliation:

Strides Educational Foundation, Nigeria Nigeria

Bio Statement (e.g., department and rank)

Olawale Isaac Wale-Awe is a fellow of the Institute of Chartered Accountants of Nigeria (ICAN ). He was a lecturer as well as Head of the Department of Accounting and Sub-Dean of Faculty, Ekiti State University, Nigeria (1996-2008). He was Director of Examinations, then Director of Student Affairs and later Director Membership Affairs at ICAN (2008-2016). He was awarded the title of Justice of the Peace (JP) by the Ekiti State Government in Nigeria, and receive his PhD from Ekiti State University in 2019. He is the executive chairman of Strides Educational Foundation. He consults for Sage Education Limited, and local and international organisations. He has written five books, published many articles and delivered papers at conferences.

Luqman Adedamola Sulaiman

sulaimanluq01@gmail.com

Affiliation:

Ekiti State University, Nigeria Nigeria

Bio Statement (e.g., department and rank)

Luqman Adedamola Sulaiman is a Senior Lecturer in the Department of Finance at Ekiti State University, Ado Ekiti. He was a postdoctoral scholar at the University of KwaZulu-Natal, South Africa, between 2014 and 2016. He obtained his PhD from Ekiti State University in 2013. He is a prolific writer with many publications to his credit. He has attended several conferences across the globe.