Modeling Petroleum Product Demand in Nigeria Using Structural Time Series Model (STSM) Approach
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AbstractIn this paper, the demand function for five major petroleum products consume in Nigeria namely gasoline, diesel, kerosene, fuel oil, liquefied petroleum gas (LPG) and aggregate was estimated using Structural Time Series Models (STSMs) which accounts for structural changes in energy demand estimation. STSMs incorporate stochastic rather than deterministic trend which is more general and therefore argued to be more appropriate in this study. The results suggest that the demand for petroleum products in Nigeria is both price and income inelastic and the underlying demand trends were generally stochastic in nature. LPG has relatively higher elasticities than the rest of the petroleum products, namely kerosene, gasoline, diesel and fuel oil. Keywords: Petroleum Product; demand; STSM; Stochastic Trend JEL Classifications: C32; Q43; Q47
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How to Cite
Abdullahi, A. B. (2014). Modeling Petroleum Product Demand in Nigeria Using Structural Time Series Model (STSM) Approach. International Journal of Energy Economics and Policy, 4(3), 427–441. Retrieved from https://www.econjournals.com/index.php/ijeep/article/view/769