IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v7y2023i12p597-626.html
   My bibliography  Save this article

Macroeconomic and Institutional Reforms of Energy Pricing Policies in Nigeria; How Effective?

Author

Listed:
  • Olujobi, Oluwatosin Michael

    (Department of Economics, College of Social and Management Science, Achievers University, Owo, Ondo-State, Nigeria)

  • Olubokun, Sanmi

    (Department of Economics, College of Social and Management Science, Achievers University, Owo, Ondo-State, Nigeria)

  • Femi Seun Benjamin

    (Department of Business Administration, Adekunle Ajasin University Akungba Akoko, Faculty of Administration and Management Sciences)

Abstract

The objective of this paper is to examine the impact of institutional reforms in Nigeria on energy pricing policies, energy supply, and fossil fuel subsidy initiatives, comparing them with global practices. This assessment scrutinizes Nigeria’s commitment to its predetermined goals by evaluating how these policies influence socioeconomic welfare, consumer productivity, and empowerment. Furthermore, the study reviews the primary challenges facing Nigeria’s energy sector, examining their macroeconomic dimensions and the impact of governmental institutional reforms. By utilizing variance decomposition (VDC) within the vector error correction model (VECM), the paper tests the influence of energy pricing and various reforms on key macroeconomic variables. This analysis is complemented by Granger causality tests to explore long-term cause-and-effect relationships among the variables. Additionally, the assessment employs inverse roots of AR to estimate the marginal social cost of reduced energy subsidies. The investigation also extends to using impulse response function techniques to explore the economic and environmental implications of energy subsidies and carbon emissions in Nigeria. The study highlights limitations such as technological constraints and inadequate regulatory or market-based policies, which diminish policy effectiveness. Consequently, the study recommends the development of more robust energy conservation policies, emphasizing the need for well-coordinated frameworks addressing climate change. It also calls for diversification in energy mixes.â€

Suggested Citation

  • Olujobi, Oluwatosin Michael & Olubokun, Sanmi & Femi Seun Benjamin, 2023. "Macroeconomic and Institutional Reforms of Energy Pricing Policies in Nigeria; How Effective?," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(12), pages 597-626, December.
    • Handle: RePEc:bcp:journl:v:7:y:2023:i:12:p:597-626
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-7-issue-12/597-626.pdf
    Download Restriction: no
    File URL: https://www.rsisinternational.org/journals/ijriss/articles/macroeconomic-and-institutional-reforms-of-energy-pricing-policies-in-nigeria-how-effective/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Olusola OLUJOBI, 2017. "Legal Framework for Combating Corruption in Nigeria The Upstream Petroleum Sector in Perspective," Journal of Advanced Research in Law and Economics, ASERS Publishing, vol. 8(3), pages 956-970.
    2. repec:srs:journl:jarle:v:8:y:2017:i:3:p:956-970 is not listed on IDEAS
    3. Rahul Anand & Mr. David Coady & Mr. Adil Mohommad & Mr. Vimal V Thakoor & Mr. James P Walsh, 2013. "The Fiscal and Welfare Impacts of Reforming Fuel Subsidies in India," IMF Working Papers 2013/128, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nils Ohlendorf & Michael Jakob & Jan Christoph Minx & Carsten Schröder & Jan Christoph Steckel, 2021. "Distributional Impacts of Carbon Pricing: A Meta-Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 78(1), pages 1-42, January.
    2. Olujobi, Olusola Joshua & Oyewunmi, Olabode & Igbinoba Ebeguki & Olusola-Olujobi Temilola*, 2019. "Re-Appraising the Statutory and Ethical Roles of Lawyers Pursuant to Nigeria’s Administration of Criminal Justice Act, 2015," The Journal of Social Sciences Research, Academic Research Publishing Group, vol. 5(7), pages 1184-1192, 07-2019.
    3. Ronita Bardhan & Ramit Debnath & Arnab Jana, 2019. "Evolution of sustainable energy policies in India since 1947: A review," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 8(5), September.
    4. Rabiu Maijama’a & Kabiru Saidu Musa, 2021. "Crude Oil Price, Interest Rate and Unemployment Nexus in Nigeria: An Application of Toda and Yamamoto Long-Run Causality Procedure," Marketing and Branding Research, EUROKD, vol. 8(1), pages 1-16.
    5. Khalid, Syed Adnan & Salman, Verda, 2020. "“Welfare impact of electricity subsidy reforms in Pakistan: A micro model study”," Energy Policy, Elsevier, vol. 137(C).
    6. Ying, Loo Sze & Harun, Mukaramah, 2019. "Responses of Firms and Households to Government Expenditure in Malaysia: Evidence for the Fuel Subsidy Withdrawal," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 53(2), pages 29-39.
    7. Pradeep, Siddhartha, 2022. "Impact of diesel price reforms on asymmetricity of oil price pass-through to inflation: Indian perspective," The Journal of Economic Asymmetries, Elsevier, vol. 26(C).
    8. Jun Rentschler & Morgan Bazilian, 2017. "Policy Monitor—Principles for Designing Effective Fossil Fuel Subsidy Reforms," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 11(1), pages 138-155.
    9. Amin, Sakib & Jamasb, Tooraj & Llorca, Manuel & Marsiliani, Laura & Renström, Thomas I., 2022. "Decarbonisation policies and energy price reforms in Bangladesh," Energy Policy, Elsevier, vol. 170(C).
    10. Ian W.H. Parry & Baoping Shang & Mr. Philippe Wingender & Nate Vernon-Lin & Tarun Narasimhan, 2016. "Climate Mitigation in China: Which Policies Are Most Effective?," IMF Working Papers 2016/148, International Monetary Fund.
    11. Chattopadhyay, Manojit & Kumar Mitra, Subrata, 2015. "Exploring asymmetric behavior pattern from Indian oil products prices using NARDL and GHSOM approaches," Energy Policy, Elsevier, vol. 86(C), pages 262-272.
    12. World Bank, 2016. "Republic of Angola Poverty and Social Impact Analysis," World Bank Publications - Reports 25105, The World Bank Group.
    13. Nils Ohlendorf & Michael Jakob & Jan Christoph Minx & Carsten Schröder & Jan Christoph Steckel, 2018. "Distributional Impacts of Climate Mitigation Policies - a Meta-Analysis," Discussion Papers of DIW Berlin 1776, DIW Berlin, German Institute for Economic Research.
    14. Jun E Rentschler & Nobuhiro Hosoe, 2017. "Illicit dealings: Fossil fuel subsidy reforms and the role of tax evasion and smuggling," GRIPS Discussion Papers 17-05, National Graduate Institute for Policy Studies.
    15. Bentour, El Mostafa, 2015. "On the removal of energy products subsidies in an importing oil country: impacts on prices in Morocco," MPRA Paper 63635, University Library of Munich, Germany.
    16. Omotosho, Babatunde S., 2020. "Oil price shocks, fuel subsidies and macroeconomic (in)stability in Nigeria," MPRA Paper 105464, University Library of Munich, Germany.
    17. Xie, Lei & Hou, Pengwen & Han, Hongshuai, 2021. "Implications of government subsidy on the vaccine product R&D when the buyer is risk averse," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 146(C).
    18. Daniel E. Ufua & Olusola J. Olujobi & Mercy E. Ogbari & Joseph A. Dada & Oluwatosin D. Edafe, 2020. "Operations of small and medium enterprises and the legal system in Nigeria," Palgrave Communications, Palgrave Macmillan, vol. 7(1), pages 1-7, December.
    19. Amin, Sakib & Marsiliani, Laura & Renström, Thomas, 2018. "The Impacts of Fossil Fuel Subsidy Removal on Bangladesh Economy," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 41(02), pages 65-81, June.
    20. Biatna Dulbert Tampubolon & Ajun Tri Setyoko, 2019. "Controlling Policies on Fossil Fuels Subsidies to Overcome Climate Change," Energy Economics Letters, Asian Economic and Social Society, vol. 6(1), pages 1-16, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:7:y:2023:i:12:p:597-626. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.