Abstract
The study examined the impact of petroleum price fluctuation on the price of locally and
imported milled rice in Nigeria using secondary data. Descriptive statistics, Johansen co
integration and error correction model were employed. The result showed an upward trend in
crude oil, PMS and AGO prices, alongside consistent increase in the locally and imported
milled rice prices over the study period. The Johansen’s co-integration test statistics revealed
the existence of long-run relationship among all variables. The analysis revealed that crude
oil prices exert an indirect short run effect on rice prices while PMS and AGO have a direct
and significant long run impact. A unit increase in petroleum product prices was associated
with a proportional rise in rice prices, reflecting cost transmission across production,
processing, transportation, and marketing. However, crude oil price effects differed between
locally and imported rice, influenced by domestic fuel pricing policies and import dynamics.
Thus, the findings highlights Nigeria’s rice market vulnerability to global price shocks and
domestic fuel policy changes, with implications for food inflation and food security. To mitigate
rice price volatility, policy measure should focus on stabilizing fuel prices through subsidy
reforms, investing in local refining and alternative energy, promoting energy-efficient
agricultural machinery, enhancing transportation infrastructure, regulating rice import
policies, and establishing price stabilization mechanisms. These interventions could reduce
inflationary pressures from petroleum price shocks and strengthen national food security.
References
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Ali, T., Huang, J., and Yang. J. (2013). Impact Assessment of Global and National Bio-Fuels
Development on Agriculture in Pakistan. Applied Energy, 104: 466-474.
Ayala, M. (2010). Co-integration and Time Series Analysis from Arab countries Food Gap
(1980-2007). Journal of Economics and engineering, Vol. 346(3): Pp 152-166.
Baffes, J. (2013). A Framework for Analysing the Interplay among Food, Fuels, and Biofuels.
Global Food Security, 2: Pp 110-116.
Bala, U., and Chin, L., (2018). Asymmetric Impacts of Oil Price on Inflation: An Empirical
Study of African OPEC Member Countries. Energies 2018, 11(17): Pp 1-21
Bernerjee, A., Dolado, J. J., and Mestre, R. (1998). Error Correction Model Tests for Co
integration in a Single Equation Framework: Journal of Time Series Analysis. 19(3):
Pp. 267-283
Binuomote, S. O., and Odeniyi, K. A. (2013). Effect of Crude Oil Price on Agricultural
Productivity in Nigeria (1981-2010). International Journal of Applied Agriculture and
Apiculture Research, 9(1-2): 131-139.
Bobai, F. D. (2012). An Analysis of the Relationship between Petroleum Prices and Inflation
in Nigeria. International Journal of Business and Commerce, 1 (12), 1-7.
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www.cbn.gov,ng
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www.cbn.gov,ng
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(3666a), pp 427-431.
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July 17, 2014, from: https://www.nigeriavillagesquare.com/articles.html
Engle, R. F., and Granger, C. W. J., (1987). Co-integration and Error-correction:
Representation, Estimation and Testing. Econometrica, 19(3): Pp. 251-276.
FAO, (2011). Food and Agriculture Organization (FAO). Price Fluctuations and why Price
volatility Retrieved from; https://carnegieendowment.org/2011/01/13/how-to-stop
rise-in-food-price-volatility-pub-42292 on 14th of September, 2021 at 12.13am
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FMARD, (2022). Federal Ministry of Agriculture and Rural Development. Agricultural Seed
Price Survey, accessed via; https://elibrary.fmard.gov.ng/ on 12/12/2022
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Economy-wide Linkages to the Agricultural Sector. Journal of Agricultural and
Resource Economics, 18(1): 96-116.
Ibrahim, M. H. (2015). Oil and Food Prices in Malaysia: A Non-linear ARDL Analysis.
Agricultural and Food Economics, 3(2): Pp 1-14. https://doi.org/10.1186/s40100-14
0020-3.
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Vector Autoregressive Models. Econometrica, 2: Pp 1551-1580
Johansen, S., and Joselius, K. (1990). Maximum Likelihood Estimation and Inference on Co
integration with Applications to the Demand for Money. Oxford Bulletin of Economics
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Kanu, C., Idume, G., Nwokeiwu, J., Ugwu, J., Ikpor, I. M and Edeogu, P. (2019). Impact of
the Petroleum Products Prices on Consumer Products Prices in Nigeria. International
Journal of Mechanical Engineering and Technology, 10(10), 249-262
Kilian, L., and Park, C. (2009). The Impact of Oil Price Shocks on the US Stock Market.
International Economic Review, 50(4): Pp 1267-1287
Kyarem, R. N, and Felix E. D. (2023). Impact of Petroleum Product Prices Changes on Prices
of Food Items in the Nigerian Economy. Journal of Development Economics and
Finance, Vol. 4 (1), 79-95; http://DOI: 10.47509/JDEF.2023.v4i01.05
Medugu, I. N. (2010). The Role of Afforestation programme in combating Desertification in
Nigeria. International Journal of Climatic Changes Strategies and Management, Vol.
2(1): Pp 35-47
Mohammed, R. (2019). The Impact of Crude oil Price on Food Prices in Iraq. OPEC Energy
Review, 46 (1), 106-122
Muhammad, A., and Mansur, M. (2018). Is the Oil Price Pass-through to Domestic Inflation
Symmetric or Asymmetric? New Evidence from India based on NARDL, Munich
Personal RePEc Archive. Retrieved from: https://mpra.ub.uni-muenchen.de/87569
MPRA Paper No. 87569
Newey, W. K., and West, K. D., (1987). A Simple, Positive Semi-definite, Heteroscedasticity
and Autocorrelation Consistent Covariance Matrix. Econometrica 55: Pp 703-708.
https://doi.org/10.2307/13991481.
NPC, (2006). National Population Commission (NPC) (2006), Abuja, Nigeria.
Nwosa, P.I. (2013). The Effect of Gasoline Price on Economic Sectors in Nigeria. International
Journal of Energy Economics and Policy, 3(1): Pp 2146-2553.
Obioma, R., (2006). An Examination of Oil Prices and their Changes on Nigerian Economic
Growth. Journal of Welfare Economics, 4(2): Pp 25-34.
Ocheni, S. I. (2015). Impact of Fuel Price Increase on the Nigerian Economy. Mediterranean
Journal of Social Sciences, 6(51): Pp 2039-2140
Oladimeji, Y. U., Abdulsalam, Z. and Ayandotun, B. W. (2018). Profitability and Energy Gaps
of Semi-mechanized and Traditional Rice Production Technologies in North Central
and Northwestern Nigeria. Agricultural Engineering International: CIGR Journal,
20(2): Pp 116-125
Orlu, R. N., (2017). The Impact of Domestic Pricing of Petrol on the Economic Growth of
Nigeria (1970-2013). Global Journal social sciences, 16(1): Pp 1-8,
https://dx.doi.org/10.4314/gjss.v16;1.1
Philips, P. C., and Perron, P., (1988). Testing for a Unit Root in Time Series Regression.
Biometrica, 75(2): Pp 335-346.
Sands, R. and Westcott, P. (2011). Impact of Higher Energy Prices on Agriculture and Rural
Economies. Economic Research Service/ ERR- 123. Economic Research
Service/USDA.
Tukur, M.D. (2014). Assessment of Impact of Petroleum Pipelines Vandalization on
Agricultural Productivity of Selected Communities in Rivers State, Nigeria. Pp 47-61
Tule, M., Salisu, A. A., and Chiemeke C. (2018). You Are What You Eat: The Role of Oil
Price in Nigeria Inflation Forecast - Centre for Econometric and Allied Research, the
University of Ibadan Working Papers Series, Cwps 040.
World Bank, (2020). World Development Indicators Report on Nigeria, Washington DC:
Author.
in Nigeria. International Conference of Agricultural Economists, Milan, Italy, Pp 6-12.
August 8-14.
Ali, T., Huang, J., and Yang. J. (2013). Impact Assessment of Global and National Bio-Fuels
Development on Agriculture in Pakistan. Applied Energy, 104: 466-474.
Ayala, M. (2010). Co-integration and Time Series Analysis from Arab countries Food Gap
(1980-2007). Journal of Economics and engineering, Vol. 346(3): Pp 152-166.
Baffes, J. (2013). A Framework for Analysing the Interplay among Food, Fuels, and Biofuels.
Global Food Security, 2: Pp 110-116.
Bala, U., and Chin, L., (2018). Asymmetric Impacts of Oil Price on Inflation: An Empirical
Study of African OPEC Member Countries. Energies 2018, 11(17): Pp 1-21
Bernerjee, A., Dolado, J. J., and Mestre, R. (1998). Error Correction Model Tests for Co
integration in a Single Equation Framework: Journal of Time Series Analysis. 19(3):
Pp. 267-283
Binuomote, S. O., and Odeniyi, K. A. (2013). Effect of Crude Oil Price on Agricultural
Productivity in Nigeria (1981-2010). International Journal of Applied Agriculture and
Apiculture Research, 9(1-2): 131-139.
Bobai, F. D. (2012). An Analysis of the Relationship between Petroleum Prices and Inflation
in Nigeria. International Journal of Business and Commerce, 1 (12), 1-7.
CBN, (2019). Central Bank of Nigeria Statistical Bulletin, CBN Publication, available at;
www.cbn.gov,ng
CBN, (2022). Central Bank of Nigeria Statistical Bulletin, CBN Publication, available at;
www.cbn.gov,ng
Dickey, D. A., and Fuller, W. A. (1979). Distribution of the Estimators for Autoregressive
Time Series with a Unit Root. Journal of the American Statistical Association; 74:
(3666a), pp 427-431.
Dike, J., (2007). Nigeria: Reform Efforts and Unresolved Socio-economic Problems. Retrieved
July 17, 2014, from: https://www.nigeriavillagesquare.com/articles.html
Engle, R. F., and Granger, C. W. J., (1987). Co-integration and Error-correction:
Representation, Estimation and Testing. Econometrica, 19(3): Pp. 251-276.
FAO, (2011). Food and Agriculture Organization (FAO). Price Fluctuations and why Price
volatility Retrieved from; https://carnegieendowment.org/2011/01/13/how-to-stop
rise-in-food-price-volatility-pub-42292 on 14th of September, 2021 at 12.13am
FAO, (2017). Food and Agriculture Organization of the United Nations. FAOSTAT
Publications Rice Ban in Nigeria retrieved via; https://fao.org/faostat/en/ on 18/121/21
FEWSNET, (2022). Famine Early Warning System Network, Monthly Staple Food
Commodity Prices in Nigeria. FEWSNET Publications.
FMARD, (2022). Federal Ministry of Agriculture and Rural Development. Agricultural Seed
Price Survey, accessed via; https://elibrary.fmard.gov.ng/ on 12/12/2022
Hanson, K., Robinson, S., and Schluter, G. (2010). Sectoral Effects of a World Oil Price Shock:
Economy-wide Linkages to the Agricultural Sector. Journal of Agricultural and
Resource Economics, 18(1): 96-116.
Ibrahim, M. H. (2015). Oil and Food Prices in Malaysia: A Non-linear ARDL Analysis.
Agricultural and Food Economics, 3(2): Pp 1-14. https://doi.org/10.1186/s40100-14
0020-3.
IRRI, (2001). International Rice Research Institute (IRRI), Rice statistics accessed online at
https://oryza.com/africa/nigeria/index.shtml on 22/11/2024
Johansen, S. (1991). Estimation and Hypothesis Testing of Co-integration Vectors in Gaussian
Vector Autoregressive Models. Econometrica, 2: Pp 1551-1580
Johansen, S., and Joselius, K. (1990). Maximum Likelihood Estimation and Inference on Co
integration with Applications to the Demand for Money. Oxford Bulletin of Economics
and Statistics, 52: Pp 169-210.
Kanu, C., Idume, G., Nwokeiwu, J., Ugwu, J., Ikpor, I. M and Edeogu, P. (2019). Impact of
the Petroleum Products Prices on Consumer Products Prices in Nigeria. International
Journal of Mechanical Engineering and Technology, 10(10), 249-262
Kilian, L., and Park, C. (2009). The Impact of Oil Price Shocks on the US Stock Market.
International Economic Review, 50(4): Pp 1267-1287
Kyarem, R. N, and Felix E. D. (2023). Impact of Petroleum Product Prices Changes on Prices
of Food Items in the Nigerian Economy. Journal of Development Economics and
Finance, Vol. 4 (1), 79-95; http://DOI: 10.47509/JDEF.2023.v4i01.05
Medugu, I. N. (2010). The Role of Afforestation programme in combating Desertification in
Nigeria. International Journal of Climatic Changes Strategies and Management, Vol.
2(1): Pp 35-47
Mohammed, R. (2019). The Impact of Crude oil Price on Food Prices in Iraq. OPEC Energy
Review, 46 (1), 106-122
Muhammad, A., and Mansur, M. (2018). Is the Oil Price Pass-through to Domestic Inflation
Symmetric or Asymmetric? New Evidence from India based on NARDL, Munich
Personal RePEc Archive. Retrieved from: https://mpra.ub.uni-muenchen.de/87569
MPRA Paper No. 87569
Newey, W. K., and West, K. D., (1987). A Simple, Positive Semi-definite, Heteroscedasticity
and Autocorrelation Consistent Covariance Matrix. Econometrica 55: Pp 703-708.
https://doi.org/10.2307/13991481.
NPC, (2006). National Population Commission (NPC) (2006), Abuja, Nigeria.
Nwosa, P.I. (2013). The Effect of Gasoline Price on Economic Sectors in Nigeria. International
Journal of Energy Economics and Policy, 3(1): Pp 2146-2553.
Obioma, R., (2006). An Examination of Oil Prices and their Changes on Nigerian Economic
Growth. Journal of Welfare Economics, 4(2): Pp 25-34.
Ocheni, S. I. (2015). Impact of Fuel Price Increase on the Nigerian Economy. Mediterranean
Journal of Social Sciences, 6(51): Pp 2039-2140
Oladimeji, Y. U., Abdulsalam, Z. and Ayandotun, B. W. (2018). Profitability and Energy Gaps
of Semi-mechanized and Traditional Rice Production Technologies in North Central
and Northwestern Nigeria. Agricultural Engineering International: CIGR Journal,
20(2): Pp 116-125
Orlu, R. N., (2017). The Impact of Domestic Pricing of Petrol on the Economic Growth of
Nigeria (1970-2013). Global Journal social sciences, 16(1): Pp 1-8,
https://dx.doi.org/10.4314/gjss.v16;1.1
Philips, P. C., and Perron, P., (1988). Testing for a Unit Root in Time Series Regression.
Biometrica, 75(2): Pp 335-346.
Sands, R. and Westcott, P. (2011). Impact of Higher Energy Prices on Agriculture and Rural
Economies. Economic Research Service/ ERR- 123. Economic Research
Service/USDA.
Tukur, M.D. (2014). Assessment of Impact of Petroleum Pipelines Vandalization on
Agricultural Productivity of Selected Communities in Rivers State, Nigeria. Pp 47-61
Tule, M., Salisu, A. A., and Chiemeke C. (2018). You Are What You Eat: The Role of Oil
Price in Nigeria Inflation Forecast - Centre for Econometric and Allied Research, the
University of Ibadan Working Papers Series, Cwps 040.
World Bank, (2020). World Development Indicators Report on Nigeria, Washington DC:
Author.
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