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Background of the study: INDEX NUMBER ANALYSIS ON THE PRICE OF PETROLEUM ON THE PRICE OF FOOD ITEMS (1999-2013)
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
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.
Significance of the study: INDEX NUMBER ANALYSIS ON THE PRICE OF PETROLEUM ON THE PRICE OF FOOD ITEMS (1999-2013)
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.
Aims and objectives of the study: INDEX NUMBER ANALYSIS ON THE PRICE OF PETROLEUM ON THE PRICE OF FOOD ITEMS (1999-2013)
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. This study also seeks to examine the nature of relationship that exists between petroleum prices and prices of food items in Nigeria. This study is also intended to predicting the effect of petroleum and food item prices on the economy of the nation. To proffer solutions of ensuring food security in Nigeria.
Is there a relationship between the prices of petroleum prices and the prices of food items?
What nature of relationship exists between petroleum and food items prices?
What are the ways one can ensure food security in Nigeria.