Performance Evaluation of the Nigerian Petroleum Industry: modular refinery plant alternative

Abstract

This study monitored the trend and evaluated the performance of the Nigerian Petroleum Industry (NPI) over a period of ten (10) years and also examined oil revenue and its impact on economic growth over a period of twenty-six (26) years. Secondary data on Gross Domestic Product (GDP) was used as a benchmark for economic growth. Oil revenue (OREV) and government expenditure (GEXP) which represented the decision variables were sourced from CBN publications. Advanced econometric techniques such as Augmented Dickey-Fuller Unit Root Test, Johansen Co-integration Test, Vector Error Correction Mechanism (VECM) and the net present value (NPV) method were employed and the result revealed that the variables that were not integrated on the same order justifying co-integration and error correction mechanism test. The co-integration result indicated that there is a long-run relationship between the variables with three co-integrating equation(s) and the result obtained from the error correction mechanism test shows that all the variables except lag of government expenditure exerted a significant impact on economic growth in Nigeria. The study concluded that the revenue generated from petroleum should be invested in non-oil sectors to expand the revenue base of the economy. The economic viability of the Modular Refinery Plants Alternative (MRPA) is considered viable and recommended for adoption in Nigeria.

Suggested citation

O. Odejobi , Phillip Ayoola , M. Abiodun , M. Abioye (2024). Performance Evaluation of the Nigerian Petroleum Industry: modular refinery plant alternative Koozakar Proceedings, 1(1). https://doi.org/10.69798/11782243

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