CENTRE FOR ENERGY, PETROLEUM AND MINERAL LAW AND POLICYSTATEMENT
OF ORIGINALITY STUDENT I.D.: STUDENT NAME: PROGRAMME: MODULE CODE:
TITLE OF THE RESEARCH PAPER: 090018338 AHMED ADAMU.
Msc Energy studies with specialization in Oil and Gas
Economics.CP51009 (Petroleum Policy and Economics)
WHAT IS THE IMPACT OF OIL PRICE CHANGES ON THE MAJOR
MACROECONOMIC VARIABLES IN NIGERIA?
ABSTRACT:
The force of Oil price fluctuation is enveloping these days as
it nearly affects all aspect of economic activity. Therefore, it is
important to identify the connection between Oil price changes and
the Macro economy. Consequently this paper analysed the effects of
oil price changes on the real macroeconomic activity in Nigeria.
Empirical and theoretical analyses were employed in the analysis.
The paper found evidence of some adverse implication of oil price
changes on some major individual macro-economic variables. In
particular, Oil price fluctuations was found to impeded the
economic predictability and stability in Nigeria, as oil prices
relate in one way or the other with all component of the
macro-economy of the country. Economic diversification and fuel
substitutes supported by a prudent and accountable political regime
were suggested for the country to escape from the unfavourable
implications of reliance on the erratic and depletable oil
resource.
.
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TABLE OF CONTENTS
Page
ABBREVIATIONS......... 3 CHAPTER 1:
INTRODUCTION........................................... 4 CHAPTER
2. Factors that lead to changes in oil
prices................................................. 8 2.1.
Demand and Supply Factor.............. 8 2.2. OPEC Influence.......
9 2.3. Speculation..................... 11 2.4. Other
Factors.............. 13
CHAPTER 3. Oil Price changes and Macroeconomic variables:
.................................14 3.1. Oil Price changes and
Revenue............................................. 14 3.2. Oil
Price changes and Government Expenditure................... 17 3.3.
Oil Price changes and
Inflation............................................. 19 3.4. Oil
Price changes and Private Investment.............................
20 3.5. Oil Price changes and Balance of
Payment........................... 21 3.6. Oil Price changes and
GDP................................................... 23
CONCLUSION............................. 25 BIBLIOGRAPHY.......
..27
2
LIST OF ABBREVIATIONS: ORGANIZATION OF PETROLEUM EXPORTING
COUNTRIES (OPEC) FOREING DIRECT INVESTMENT STATE OWNED COMAPANIES
NIGERIA NATIONAL PETROLEUM CORPORATION BALANCE OF PAYMENT GROSS
DOMESTIC PRODUCT IMPORTS EXPORTS (FDI) (SOCs) (NNPC) (BOP) (GDP)
(M) (X)
3
1. INTRODUCTION: Over the last several years, oil prices
fluctuate significantly. In 2009, the average crude oil price was
around US$53 and in the first quarter of 2010, it rose to the
Average of US$70. Within this period and before, Crude oil prices
had been fluctuating at least three times in every month.1 These
frequent fluctuations affect the overall economic performance
globally at least in the short term. This is because of the
increase in worldwide consumption and reliance on oil. When the
price of crude oil is high, the exporting countries experience
increase in revenue which if manage well lead to economic growth,
while importing countries typically undergo declining in economic
growth. Despite the recent increase in oil prices which induce more
revenue and economic growth to the exporting countries, the
importing countries who are resource poor usually perform
economically better than the majority of the resource rich
countries, this is because the oil importing countries who lack the
oil resource tend to invest on other sectors whose commodity prices
do not fluctuate.History of Illinois Basin Posted Crude Oil prices
(2010): History and analysis of crude oil prices, from WTRG
Economics.1
4
How much crude oil price change affects a country depends on the
share of the Oil revenue in the National Income, the degree of
dependence on imported Oil and the ability of final consumers to
substitute or reduce the consumption of Oil. Logically, the Larger
and longer the Oil price increase the bigger the macro-economic
impact.2 For net oil exporting countries, an increase in oil price
generally lead to direct increase in the real National Income,
though some part of this gain will be utilized to offset the losses
possible to occur when the trading partners demand for import
reduces due to economic recession. In the case of net importing
countries, an increase in the crude oil prices lead to inflation,
increase in input cost, reduction in tax revenues, and increase in
budget deficit because of the rigidities in government spending
which subsequently leads to increase in interest rate due to
resistance to real decline in wages. These effects are more severe
when the price increase is more sudden and more pronounced.
2
Majidi, M., (2006), Impact of Oil on International economy,
International Economics course, Centre for Science and Innovation
Studies.
5
They are also magnified by the impact of higher prices on
consumer and business confidence. 3 Nigeria, having relied more on
crude oil export earnings which account for more than 90 per cent
of its total export earnings and also constitute up to 70 per cent
of the government revenues in its annual budget,4 is becoming more
vulnerable to negative implications due to the frequent changes of
the oil prices at international market. Therefore, it is imperative
to analyse and understand the effects of these changes on the
country s macro-economy with a view to have effective policy
measures in addressing and preventing the reoccurrence of any
severe implications from oil price fluctuations in the future. The
discussion was presented base on empirical and theoretical analysis
of the impact of oil price changes on some major individual
macro-economic variables in the country. The paper is categorised
into chapters. The Introduction preceded Chapter two which
discussed the factors that lead to changes in oilWakeford, J.
(2006): The impact of oil price Shocks on the South African
Macroeconomy: History and Prospects, in Accelerated and Shared
Growth in South Africa: Determinants, constraints and
opportunities. 18-20 October. 4 Akpan, E. O., (2009), Oil price
shocks and Nigeria s Macro economy. Department of Economics,
University of Ibadan, Nigeria.3
6
prices. It was followed by chapter three which dwelled on the
impact of oil prices changes on some major macro-economic
variables. Finally Conclusion was followed by Bibliography.
7
CHAPTER 2
FACTORS THAT LEAD TO CHANGES IN OIL PRICES: The most common
knowledge is that oil price fluctuations are basically determined
by oil supply. This believes could be based on the fact that much
of the oil production is influenced by a cartel known as
Organization of the Petroleum Exporting Countries (OPEC). Other
causes could be responsible for the oil price changes, these
factors are discussed below: 2.1 DEMAND AND SUPPLY FACTOR: Many oil
supply disruption were associated with wide increases in Oil prices
for example the oil embargo of 1973 and the Iranian revolution of
1979 were apparently believed to cause large increases in prices.
Therefore, as oil supply declines the prices would increase and
vice versa. Global demand driven by economic activity and
precautionary demand to guard against future emergencies also
trigger oil price fluctuations. Kilian (2007) discussed these
factors in the context of some prominent oil price spikes, for
example he found that the price8
increase in 1979-80 were basically caused by increases in
precautionary demand, while oil production declines had a relative
impact, likewise for the Persian Gulf war period. In recent years
most of the price increases can be attributed to increased global
demand from countries like China and India. Kilian s result
provides evidence that increases in the demand for oil is the main
contributor to fluctuations in the real price of oil. However, this
does not mean that disruptions in oil supply have no effect.
Changes in supply can indirectly affect prices by raising
precautionary demand especially when the agents believe that future
disruptions may escalate. 5 2.2 OPEC INFLUENCE: Due to the status
and significance of OPEC in the oil market, it is not surprising if
OPEC is said to receive all or part of the blame for oil price
volatility. Similarly, it might not be necessary to explain the
volatility in terms of OPEC s price fixing, because OPEC has
abandoned fixing the reference price since 1987 to adopt a system
in which OPEC sets production quotas based on its appraisal of the
market s call on OPEC5
Kilian, L. (2007), Not all oil prices shocks are alike,
disentangling demand and supply shocks in the crude oil market.
University of Michigan and CEPR.
9
supply. Therefore, prices of oil changes based on how well OPEC
does this calculus. The only purpose of the process of adjusting
its production quotas is to influence price movement. However, it
is difficult for the OPEC to predict the direction of the market
adequately due to uncertainties of demand and supply, lack of
reliable and timely data about consumption, production and
inventory levels as well as unreliability of short term forecasts.
Similarly, Due to the structure of the OPEC, sometimes it will be
very difficult to implement the agreed policy even if OPEC predicts
the direction of the market correctly. This is because OPEC is a
coalition of a heterogeneous group of nations facing different
economic, social and political challenges and no incentive to share
information. Moreover, OPEC do not have monitoring system to
supervise production and shipments and more significantly no
punishment mechanism to discourage cheaters. This arrangement in
which agreements are reached at a narrow time and conclude on the
basis of concession instead of optimizing decisions
10
leads to significant uncertainty about supply conditions,
contributing to oil price volatility. 6 Therefore, it is relevant
to note that implementing output adjustment is challenging, that is
to say OPEC s response is asymmetric to global demand conditions.
Moreover, anticipations of output cuts encourage speculation about
OPEC s ability to adhere to them. These expectations can lead to
swings in net speculative positions and reversal of such positions
if the cut is less than expected or does not materialized.7 Due to
the slowness of the OPEC response to global increase in demand for
oil, further volatility could be enhancing by undersupplying the
market. The slowness of the OPEC s response to upward trend could
be the imperfect information environment. 2.3 SPECULATIONS:
Expectations on any decision of OPEC in its meetings encourage oil
price change; there are some evidences that suggest volatility
drifts
6
Hyndman, (2004), Status Quo Effects in Bargaining: An Empirical
Analysis of OPEC . For an interesting theoretical discussion on
asymmetric ability of OPEC to reach agreements in different market
conditions.7
Weston, P., and Christiansen, M. R., (2003), OPEC: Market
Stabilizer or Disruptive Influence?
11
upwards as OPEC meetings approach.8 This does not necessarily
mean that OPEC is causing the volatility and may merely reflect
market agents who are on the upside of a bet about what it might or
might not do. However, OPEC by getting it wrong sometimes, such as
in 1977-78 can induce price instability. This is related to lack of
transparency of OPEC and complexity in its decisions and
implementations as discussed above. Subsequently, OPEC has now
since 1999 include the following things in its policy
consideration: level of oil and product stocks, market speculation,
basket price range, geographical factors, supply and demand
situation and US$ exchange rate. 9 the increase in the frequency of
OPEC meetings and the increase in the frequency of quota adjustment
in recent years have also constituted to an increase in speculative
activity. 10
8
Horan et al (2004), Implied Volatility of Oil Futures Options
Surrounding OPEC Meetings, The Energy Journal, 2004, Issue 3, pp.
103-125. 9 Garcia, P A M (2005), OPEC in the 21st Century: What has
Changed and What Have We Learned ?, Oxford Energy Forum, Issue 60,
Oxford: Oxford Institute for Energy Studies.10
Supra Note 6, at 10.
12
2.4 OTHER FACTORS: In order to understand clearly the causes of
oil price volatility, the consideration has to go beyond OPEC
policies and actions. Analysis must be expanded to include some
features that have emerged in the oil market and the oil industry
in recent years. Some of these factors include gradual erosion of
OPEC spare capacity, the shift in the strategy of inventory
management by international oil companies, the increasing
importance of the oil futures market in the current oil pricing
system as well as deterioration in the quality and timeliness of
data on oil related factors.11
11
Supra Note 6, at 10.
13
CHAPTER 3
OIL PRICE CHANGES AND MACRO-ECONOMIC VARIABLES: There are
different ways which the oil exporting countries can be affected
economically due to change in oil prices. This chapter analyses the
effects of oil price changes on the Nigerian economy under some
basic macro-economic variables, namely: Revenue, Government
Expenditure, Private Investment, Inflation, GDP and Balance of
Payment. 3.1 OIL PRICE CHANGE AND REVENUE: Sources of income
differs from one country to another, most of the developed
countries, income tax is the main source of government revenue, but
in most of the oil exporting developing countries like Nigeria, oil
revenue is the main source of the government income. However, due
to over reliance on oil revenues, Nigeria is vulnerable to revenue
fluctuations due to the volatility of the oil prices at
14
international market.12 Because of the absence of stable flow of
revenue from the government, the volatility in oil prices works to
be closely equally proportionate to the revenue causing revenue to
increase and decrease almost in the exact manner as oil price,13
leading to windfall gain when the oil price is high and lack of
sufficient revenue when the price came down. Therefore, price
volatility hardly becomes beneficial, because higher prices do
little to encourage capacity increases because suppliers are unable
to do so due to some constraints beyond their control like a
depleted natural resource. Thus, windfall gains are limited to
available capacity. Similarly, if the price decreases it does not
alter the regularity of supply in the short run which will result
to decline in revenue. This is because the oil is a publicly traded
commodity and its price is determined by the interaction of
invisible hands of demand and supply globally. Due to the
unsteadiness of the oil prices, it will be difficult to accurately
project revenue. Realized revenues frequently diverge
significantly12
Ukwu, U. I., Obi, A. W., & Ukeje, S., (2003). Managing
Macro-economic volatility in Nigeria. Nigeria: African Institute
for applied Economics. 13 Ifeka, N. S., (2007). Derivatives and
risk management in the Oil and Gas Industry. What is its role in
managing price risks and its implications on the Energy Markets? .
Dissertation submitted to the University of Dundee for the degree
of Masters of Science, Scotland, UK.
15
from budget projections as huge revenue swings hampers a sound
budget (Ahmad, and Singh, 2003). Subsequently, it will be difficult
to manage the Nigerian economy due to the planning and budgeting
implications. Therefore, it is economically burdensome on oil
exporting countries that rely on oil revenues as any short falls in
the price will reduce the amount of revenue the government expect
to get in order to tackle its expenditures. This may force the
government if necessary to resort to borrowing from international
financial institutions to finances its budgets otherwise most of
the public projects will have to be either stopped or remain
unfinished. For instance, in 2008, Nigeria projected total revenue
of N1.986 trillion out of which 80 per cent was expected from oil
sales at an estimated crude oil price of US$53.83 per barrel, later
in the year the barrel prices almost doubled the estimated price
which yield lots of windfall revenues from oil sales.14 In
contrast, in 2009 the expected benchmark crude oil prices was
US$45, but in the first three months of the year the crude oil
price went below US$45, thereby causing adverse effect to
14
Site administrator, (2007). http://www.polity.org.za Nigeria:
Yar adua: 2008 budget speech (8 November).
th
16
the acquisition of the expected revenue.15 Therefore, the oil
price and Nigerian government revenue has a positive relationship.
3.2 OIL PRICE CHANGE AND GOVERNMNET EXPENDITURE: Government
expenditure also reacts considerably to oil price changes in the
same way with Revenue. Government s spending generates from its
revenue, as such the higher the revenue the higher the spending.
Due to over reliance on oil as a main source of revenue in Nigeria,
volatility of oil prices forces serious disruptive effects on the
government spending. As mentioned by Humphreys et al (2007)
volatility in receipts often translates into volatility in
expenditure this can be proved by the fact that spending and
investment tend to be high if the oil prices are high while the
reverse is the case when oil prices are low. Robert Weiner (2000)
stated that sudden decline in government revenues make the
government incapable of fulfilling its commitments and finishing
its investment projects in time .
15
Editorial, Daily independent (2008). Nigeria: 2009 Federal
Government Budget. http://www.allafrica.com, 8 December.
th
17
More
consequences
arise
when
separating
the
government
expenditure into segments or pledges, it is clear that some of
the pledges can be removed; others cause a greater problem if
removed because they are crucial. Oil price change tends to have an
intense influence on development expenditure than on administrative
expenditure. In other words, when the oil price is low,
administrative expenditure can be easily maintained, but
development expenditure such as construction of roads, provision of
social amenities etc tend to be cut. The other component of
government expenditure is consumption and investment expenditure,
Consumption also reflects income.16 An abrupt increase in prices of
strategic commodities in the country brings about detrimental
consequences for the economy. High oil prices in Nigeria bring
about high income resulting to increase in public consumption
primarily evidenced in high wages, salaries, transfers and
subsidies which cannot be maintained when the reverse is the case.
On the other hand, investment expenditure reacts to oil price in
the same
16
Turto2u, inflationa and oil prices:
http://www.tutor2u.net/economics/content/topics/inflation/oil_prices.htm
18
manner with consumption expenditure, the higher the oil prices
(more revenues) the higher the investment and vice versa. The
difference is that when the oil price is low, the Nigerian
government reduce the investment expenditure in favour of the
consumption expenditure to keep the ministries and institutions
moving.17 3.3 OIL PRICE CHANGE AND INFLATION: As an oil dependent
country, Nigeria experiences frequent increase in the prices of
consumer goods because of the frequent increase of the oil prices.
An increase in the price of petrol litre will make the market
suppliers to promptly increase the prices of commodities without
letting the oil price change to reflect in their cost of supply,
and commodity prices do not usually came down when the petrol litre
price came down, which forces unnecessary inflation. Thus general
price level and crude oil prices tend to have positive relationship
in the country. Though increase in the oil price tend to impose a
severe economic implication in terms of inflation but decrease in
the oil price do little or no impact on the prices of consumer
goods.17
Ahmad, E., and Singh, R., (2003). Political Economy of oil
revenue sharing in a developing country: illustrations from
Nigeria. Washington: IMF working Paper WP/03/06.
19
This kind of trend has been technically observed globally. In
theory, the casual relationship is obvious in the second half of
2000 and 2008; an increase in oil prices causes an inward shift in
short run aggregate supply and puts upward pressure on the price
level. Therefore a sharp increase in the crude oil price lead to an
exogenous inflationary shock and the consequences will be larger
especially for a large scale importer of oil which has many
industries that use oil as a basic input in the production
process.18 As mentioned earlier, an increase in oil prices bring
about increase in the government expenditure which constitute more
of administrative expenditures accruing to more money possession in
the hands of citizens which trigger sky rocketing of general price
level. 3.4 OIL PRICE CHANGE AND PRIVATE INVESTMENT: Oil price
changes have an adverse effect on both Local and Foreign Direct
Investment (FDI); it tends to have the same manner of relationship
with investments as with government revenue and expenditure. An
increase in the oil prices lead to an increase in the level18
Supra Note 16, at 17.
20
of investment and vice versa, for instance in 1986, investments
dropped rapidly in Nigeria due to decrease in the oil prices.19 The
factor that influences the behaviours of investors is the future
value of their investment and this has raised the concern of
volatility. The cash flows which are discounted to present values
in determining the project s viability is significant to investors
and setting up the cash flows becomes difficult in the presence of
oil price volatility, because it is difficult to project the level
at which the oil price rise or fall. Price volatility as mentioned
earlier lead to unpredictability in the revenue and expenditure, as
a result, the following risks are imposed; Volatility in exchange
rate, unsteadiness of profits, higher risks and unstable economy,
thereby making an investment in the country less attractive. 3.5
OIL PRICE CHANGE AND BALANCE OF PAYMENT: Balance of payment (BOP)
is an accounting record of all monetary transactions between a
country and the rest of the world; these transactions include
payments from the country s exports and imports of goods and
services, financial capital as well as financial transfers.
It19
Supra Note 17, at 18.
21
includes remitted profits by overseas-owned companies and
interest repayment on loans and the capital and financial account.
To relate BOP with oil price changes, current account which is a
BOP component and which is the value of goods exported minus the
value of imported goods is considered as a measure.20 When the
value of exported goods and services is higher than the imported
goods and services, the country is considered to have a surplus.
When the value of exported goods and services are lower than the
imported goods and services, the country is said to encounter
deficit. Everything being equal, an increase in the oil price will
increase the value of exports for oil exporting countries and
increase the value of imports for oil importing countries. When oil
price falls, the value of exports falls over imports resulting to a
goods deficit. The level of BOP movement is measured relative to
price by using Terms of Trade index. The Terms of Trade index is
the index of export prices divided by an index of import prices.21
EXPORT PRICE INDEX TERMS OF TRADE=20 21
IMPORT PRICE INDEX
X 100
Sloman, J., (2004). Economics. Peguin. Pp 516-517 Addiso, D.,
(2008). Managing extreme volatility for long term growth. In
collier, P., Soludo, C. C., and Patillo, C. (eds). Economic policy
options for a prosperous Nigeria. UK: Palgrane Mc-millian.
22
The higher the terms of trade above 100 i.e. the price of
exports has increase relative to the price of imports which imply
favourable and improved terms of trade, the bigger the BOP. Terms
of Trade tend to fluctuate in Nigeria due to the volatility of oil
prices. A decrease in oil prices lead to fall in Terms of Trade
below 100, BOP is unfavourable and deteriorating at this condition.
Terms of trade of Nigeria as an oil exporting country tend to be so
volatile due to the large ratio of oil exports to total exports as
compared to a more diversified Imports (M) portfolio. Therefore,
changes in price of oil causes a large change in the overall value
of exports (X), because oil constitute larger portion of the total
exports
3.6 OIL PRICE CHANGE AND GDP:Hamilton (1983) Majority of the
economic recessions was due to rise in the oil prices in the oil
importing countries. Economies of oil exporting countries tend to
be more volatile as shown in their Gross Domestic Products (GDPs)
compare to non-oil commodities exporting countries whose prices are
stable and predictable. Hooker (1996) found that for the 1948-1972
pre-embargo period, a 10 per cent oil price increase reduced GDP by
0.6 per cent in United State of America. However,23
David B. Et al (1999) stated that Nigeria experienced a large,
temporary trade windfall beginning in 1974 and ending 1981, the
estimated value of the windfall during these years was almost
double annual GDP just prior to the boom, therefore, increase in
the oil price help improve GDP, this is because Nigeria, is an
exporting country, but during these period, the windfall revenues
would have been reserved for the future recessions to mitigate the
difficulties. An increase in oil price leads to rise in GDP of
Nigeria due to increase in revenues, expenditure and investment.
Similarly, decrease in oil prices lead to low GDP due to fall in
revenues, expenditure and investment. Revenues, expenditure,
investment and Balance of Payments fluctuate in the same manner
with oil price fluctuations. An increase in one of the component of
aggregate demand causes GDP to increase.
24
CONCLUSION:Fluctuation of oil prices is a common phenomenon, its
causes are familiar, but its implications and impact on
macro-economy are seldom discussed. Divergent reasons could trigger
the fluctuations but similar implications on the economy were
observed especially in developing countries. A resource rich
developing country like Nigeria faces economic fluctuations as the
price of the pervasive and income generating fuel (i.e. oil) tends
to be volatile. In Nigeria huge oil revenue did not reflect on the
economy and the standard of living of the citizens, as the
fluctuations of oil prices imposes an adverse effect on individual
macro-economic variables in the country. Subsequently, the paper
analysed how the oil prices impacted on some major macro -economic
variables in order to help provide policy recommendations and
information for appropriate economic measures and adjustments.
Government revenue and expenditure, inflation, private investment,
GDP and exports was observed to have a positive correlation with
oil prices unlike imports that tend to have negative relationship
with oil prices in the country. This implies that dependence on oil
whose prices are volatile as a major export commodity and source of
income to the25
government is risky to the economy. To address the economic
implication of oil price volatility, other sectors of the economy
must be revived, alternative fuels developed, energy conservation
enhanced, and a prudent, transparent and committed political regime
must be provided to support any economic reform and development in
the country. Further extensive studies are recommended on the
relationship of oil prices with each macroeconomic variable using a
bigger sample and other econometric approaches that could generate
similar findings.
26
BIBLIOGRAPHY: BOOKS:Addiso, D., (2008). Managing extreme
volatility for long term growth. In collier, P., Soludo, C. C., and
Patillo, C. (eds). Economic policy options for a prosperous
Nigeria. UK: Palgrane Mc-millian.
David Bevan, et al, (1999), The political Economy of Poverty,
Equity and Growth, Nigeria and Indonesia, Oxford University Press,
New York, P46. Sloman, J., (2004). Economics. Pp 516-517. ISBN:
978-0-582-84325-7 Peguin, Longman Group.
ARTICLES:Ahmad, E., and Singh, R., (2003). Political Economy of
oil revenue sharing in a developing country: illustrations from
Nigeria. Washington: IMF working Paper WP/03/06.
Akpan, E. O., (2009), Oil price shocks and Nigerias Macro
economy. Department of Economics, University of Ibadan,
Nigeria.
Garcia, P A M (2005), OPEC in the 21st Century: What has Changed
and What Have We Learned ?, Oxford Energy Forum, Issue 60, Oxford:
Oxford Institute for Energy Studies.
27
History of Illinois Basin Posted Crude Oil prices (2010):
History and analysis of crude oil prices, from WTRG Economics.
Hooker, M., (1996), What happened to the oil price-macro-economy
relationship?, journal of monetary Economics, 38, 195-213.
Horan et al (2004), Implied Volatility of Oil Futures Options
Surrounding OPEC Meetings, The Energy Journal, 2004, Issue 3, pp.
103-125.
Hyndman, (2004), Status Quo Effects in Bargaining: An Empirical
Analysis of OPEC. For an interesting theoretical discussion on
asymmetric ability of OPEC to reach agreements in different market
conditions.
Ifeka, N. S., (2007). Derivatives and risk management in the Oil
and Gas Industry. What is its role in managing price risks and its
implications on the Energy Markets? . Dissertation submitted to the
University of Dundee for the degree of Masters of Science,
Scotland, UK.
Kilian, L. (2007), Not all oil prices shocks are alike,
disentangling demand and supply shocks in the crude oil market.
University of Michigan and CEPR.
Majidi, M., (2006), Impact of Oil on International economy,
International Economics course, Centre for Science and Innovation
Studies.
Robert, J. W., (2000), Managing Petroleum Fiscal Dependence, the
Centre for Latin America Issues.28
Ukwu, U. I., Obi, A. W., & Ukeje, S., (2003). Managing
Macroeconomic volatility in Nigeria. Nigeria: African Institute for
applied Economics.
Wakeford, J. (2006): The impact of oil price Shocks on the South
African Macroeconomy: History and Prospects, in Accelerated and
Shared Growth in South Africa: Determinants, constraints and
opportunities. 18-20 October.
Weston, P., and Christiansen, M. R., (2003), OPEC: Market
Stabilizer or Disruptive Influence?
OTHERS:Editorial, Daily independent (2008). Nigeria: 2009
Federal Government Budget. http://www.allafrica.com, 8th
December.
Site administrator, (2007). http://www.polity.org.za Nigeria:
Yaradua: 2008 budget speech (8th November).
Turto2u, inflationary and oil prices:
http://www.tutor2u.net/economics/content/topics/inflation/oil_prices.ht
m
29