TITLE PAGE
INDEX
NUMBER ANALYSIS ON THE PRICE OF PETROLEUM ON THE PRICE OF FOOD ITEMS
(1999-2013)
CHAPTER ONE
INTRODUCTION
1.1.
Background
of the study
The
effect of prices of petroleum products on food items and the economy of Nigeria
cannot be over emphasized.Petroleum products range from aviation fuel to kerosene
just to mention a few, this is solely due to the lack of diversification of the
economy. 85% of Nigeria gross domestic product (GDP) is being accounted for by
the petroleum sector (Mahmud 2009). Before the discovery of crude oil in the
early 70’s, agriculture was the main driver of the economy which has helped in
the country’s development in these periods, there was hardly any incident to
hike of products and services. The price stability of food items is of utmost
importance to every nation that wants to witness growth; this is because it is
only a healthy workforce that can give out their best in terms of work and
productivity. Overtime there may have been some arguments about the
relationship between petroleum prices and price index of food items. Some
school of thought opined that prices of petroleum prices has nothing to do with
prices of food items, questioning the agricultural stakeholders and traders for
massive exploitation during price instability of petroleum products while the
other school of thoughts are of the opinion that petroleum products does affect
the prices of food items. Petroleum is believed to have an enormous bad wagon
effect on the economy and even agricultural products this normally occurs in
the economies of the West Africa sub-region which isn’t often diversified. For
any oil producing nation that doesn’t want to know poverty of its masses then
they must have to diversify their economy so as to prevent crises in one sector
of the economy spilling over to the other sectors.
Food
items are an essential commodity for a healthy nation, the supply of food to
any nation must be done without anyform of compromise as anything less than an
adequate planning will lead to shortage in food supply which could affect the
economy of the nation. Every meaningful government should always ensure that
adequate food supply remains untouched as such shouldn’t be affected by either petroleum
1.2.
Statement
of the general problem
The
fluctuation of agricultural food items in Nigeria has been a concern for some
time now which is not good for a growing economy like ours. A nation that plays
with its agricultural sector is a nation that would encounter shortage of food
supply which may not pan out for a populous country like Nigeria. The problem
of hike of food items each time there is a little change in the prices of
petroleum items has led us to this study.
1.3.
Significance
of the study
This
study would be useful to policy makers, researchers on the economy of the
nation and above all the Nigerian government in tackling food scarcity in
Nigeria thereby ensuring food security in Nigeria.
1.4.
Aims
and objectives of the study
Ø This
study seeks to study the price fluctuation of both petroleum products and food
items with a view to knowing if petroleum price changes affects or influences a
corresponding change in prices of food items in Nigeria.
Ø This
study also seeks to examine the nature of relationship that exists between
petroleum prices and prices of food items in Nigeria.
Ø This
study is also intended to predicting the effect of petroleum and food item
prices on the economy of the nation.
Ø To
proffer solutions of ensuring food security in Nigeria.
1.5.
Research
Questions
Ø Is
there a relationship between the prices of petroleum prices and the prices of
food items?
Ø What
nature of relationship exists between petroleum and food items prices?
Ø What are the ways one can ensure food security
in Nigeria.
Ø Do
the prices of petroleum prices and prices of food items affect the economy?
1.6.
Research
hypothesis
H0:
there is no significant relationship between the prices of petroleum products
and the prices of food items.
H1:
there is a significant relationship between the prices of petroleum products
and the prices of food items.
1.7.
Scope
of the study
This
study is on the analysis on the prices of petroleum on the price of the food
items from 1999-2013.
1.8.
Limitations
of the study
Financial
constraint– Insufficient fund tends to impede
the efficiency of the researcher in sourcing for the relevant materials,
literature or information and in the process of data collection.
Time constraint–
The researcher will simultaneously engage in this study with other academic
work. This consequently will cut down on the time devoted for the research
work.
1.9.
Definition
of terms
Ø Petroleum: Crude oil, commonly known as petroleum, is a liquid found
within the Earth comprised of hydrocarbons, organic compounds and small amounts
of metal. While hydrocarbons are usually the primary component of crude oil, their composition can vary
from 50%-97% depending on the type of crude
oil and how it is extracted.
Ø Economy: economy encompasses
all activity related to production, consumption and trade of goods and
services in an area. The economy applies to everyone from individuals to
entities such as corporations and governments. The economy of a particular
region or country is governed by its culture, laws, history, and geography,
among other factors, and it evolves due to necessity.
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