Effect of Oil Price on Nigerian Economy

Abstract

The purpose of this seminar work is on effect of oil price  on  Nigerian economy .Specifically the study aimed to pursue the following objectives: To determine the extent at which oil price instability affect standard of living  and  ascertain the nature of the relationship between increase in oil price and cost of goods/service . The study has a sample size of 368 using Zigmund statistical formular at 5% error to tolerance and 95% level of confidence. Instruments used for data collection were primary questionnaires and interview. The total number of 368 copies of the questionnaire was distributed while 320 copies were returned and 48 copies were not returned. Survey research design was adopted for the study. Three hypotheses were tested using Pearson product moment correlation coefficient and simple linear regression tool. The findings indicate that oil price instability negatively affected standard of living (r = 0.928; F = 1983.45; t = 44.531; p < 0.05). There was a negative relationship between increase in oil price and cost of goods/service   (r =. 913, P<.05). The study concluded that oil prices have become so important to the Nigerian economy that principal economic policy makers at the CBN and the Federal Ministry of Finance factor them into economic policy decisions. The study recommends that Nigeria should look inwards amidst the abundance of its untapped natural resources to diversify the economy of the nation, and increase export with a view to checkmating the insidious impact of the oil price fall on the economy