Effect of Crude Oil Price Shock on Inflation and Exchange Rate in Nigeria
Open accessAbstract
The study examined the effect of crude oil price shock on inflation and exchange rate in Nigeria. The study adopted an ex-post facto research design, covering the period between 1990 and 2022. Secondary data were extracted from the CBN Statistical Bulletin and World Development Indicators. Multiple regression technique was used for test of hypotheses. The findings revealed a noteworthy adverse effect of oil price shocks on Nigeria's inflation rate, indicated by a probability value of 0.0180. Additionally, the impact of oil price shocks on exchange rates in Nigeria was also adverse and statistically significant, as reflected by a probability value of 0.047. Moreover, these findings align with established economic theory. The negative effect of oil price shocks on the exchange rate can be explained by the consistent devaluation of the Naira relative to the US Dollar in response to abrupt, particularly negative, changes in oil prices. The study, therefore, recommended that the government should enhance the proportion of funds allocated to the excess crude accounts relative to its revenue expenditures. By doing so, the government can build a financial cushion that can be tapped into when price shocks disrupt the crude oil market. Furthermore, it is advisable to employ contractionary monetary and fiscal policies when price shocks occur. These policies can effectively counteract excessive cost-push inflation that may result from the shocks. By reducing the overall demand in the economy through measures like higher interest rates and reduced government spending, inflationary pressures can be curbed.
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Integrity signals
Registry
Cites
Statistics
Claims the paper makes
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Claims other papers make about this one
Each is checked against this paper’s own text: does it say what the citing paper says it does?
Okeke, Nwoha, & Duru (2024) found that inflation in Nigeria was considerably exacerbated by the upward variation in the Bent oil price.
“Our finding of a significant positive connection between food inflation and the Bent oil price shock is additionally supported by the study carried out for Nigeria by Okeke, Nwoha, & Duru (2024), where it was econometrically verified that inflation in Nigeria was considerably exacerbated by the upward variation in the Bent oil price.”
From Devaluation, Oil Price Shock and Consumer Price Inflation: Evidence from Markov Autoregressive Regime Switching Model (2025) · cites this paper as Okeke, Nwoha, & Duru (2024)
The Interpretation of Results (page unavailable) says an increase in oil prices decreased Nigeria’s inflation rate; the regression table reports a negative oil-price coefficient. It separately finds that greater oil-price volatility increased inflation, but that is not the claimed effect of an upward price movement. The paper’s own result therefore contradicts the attributed finding. (LLM, conf=0.88)
Checked by a reasoning model — may be wrong.
Experimental — accuracy not yet measured
Self-check
Percentages, sums and reported differences re-computed from the paper’s own numbers.
The self-check needs the paper’s full text.
Cites
No references could be resolved yet.
Research works printed but not linked: 12
- Vol.12, No.2, pp.,56-66, 2024 Print ISSN: 2053-4019(Print) Online ISSN: 2053-4027(Online) Website: https://www.eajournals.org/ Publication of the European Centre for Research Training and Development -UK Vol.12, No.2, pp.,56-66, 2024 Print ISSN: 2053-4019(Print) Online ISSN: 2053-4027(Online) Website: https://www.eajournals.org/ Publication of the European Centre for Research Training and Development -UK Vol.12, No.2, pp.,56-66, 2024 Print ISSN: 2053-4019(Print) Online ISSN: 2053-4027(Online) Website: https://www.eajournals.org/ Publication of the European Centre for Research Training and Development -UK Vol.12, No.2, pp.,56-66, 2024 Print ISSN: 2053-4019(Print) Online ISSN: 2053-4027(Online) Website: https://www.eajournals.org/ Publication of the European Centre for Research Training and Development -UK Vol.12, No.2, pp.,56-66, 2024 Print ISSN: 2053-4019(Print) Online ISSN: 2053-4027(Online) Website: https://www.eajournals.org/ Publication of the European Centre for Research Training and Development -UK Vol.12, No.2, pp.,56-66, 2024 Print ISSN: 2053-4019(Print) Online ISSN: 2053-4027(Online) Website: https://www.eajournals.org/ Publication of the European Centre for Research Training and Development -UK REFERENCES
- Abubakar, A. B. (2019). Oil Price and Exchange Rate Nexus in Nigeria: Are there Asymmetries. CBN Journal of Applied Statistics, 10(1); 1-28
- Agu, C. O. and Nyatanga, P. (2022). Does the expected crude oil price influence inflation in Nigeria. African Journal of Business and Economic Research, 16(4); 117-135
- Akpan, E. O. (2009). Oil Price Shocks and Nigeria's Macro Economy. Journal of International Economics, 1-25.
- Anochiwa, L. I., & Maduka, A. (2015). Inflation and economic growth in Nigeria: empirical evidence? Journal of Economics and Sustainable Development, 6(20), 113-121.
- Bawa, S., Abdullahi, S. I., Tukur, D., Barda, S. I. and Adams, Y. J. (2020). Asymmetric Impact of Oil Price on Inflation in Nigeria. CBN Journal of Applied Statistics, 11(2); 85-113
- Magaji, M. and Singla, S. (2020). The impact of oil price shocks on exchange rate and economic growth in Nigeria: an ARDL Bound Test Co-integration approach. Journal of Economics and Environment, 1(2); 24-39
- Maku, O. E., Adegboyega, S. B. and Oyelade, A. O. (2018). Dynamic effect of oil price shocks, inflation rate and exchange rate on economic growth in Nigeria from 1980 to 2014. International Journal of Scientific & Engineering Research, 9(2); 2037-2045
- Obi, B., Awujola, A. and Ogwuche, D. (2016). Oil price shock and macroeconomic performance in Nigeria. Journal of Economics and Sustainable Development, 7(24); 137-145
- Omolade, A. (2019). Crude oil price shocks and macroeconomic performance in Africa's oil- producing countries. Cogent Economics and Finance, 7(1), 1-17
- Oyeyemi, A. M. (2013). The growth implications of oil price shock in Nigeria. Journal of Emerging Trends in Economics and Management Sciences, 4(3), 43-349.
- Umaru, A., & Zubairu, A. A. (2012). Effect of inflation on the growth and development of the Nigerian economy (an empirical analysis). International Journal of Business and Social Science, 3(10), 183-191.
Cited by
Sorted by citations
Umoru, D., Umar, S. S., & Igbinovia, B. (2025) · The Romanian Economic Journal · doi:10.24818/rej/2025/90/05
- Authors
- Okeke, S. O., Nwoha, C. E., & Duru, A. N.
- Affiliations
- Enugu State University of Science and Technology (NG)
- Venue
- European Journal of Business and Innovation Research
- Published
- 2024-01-15
- Volume
- 12
- Issue
- 2
- Pages
- 56-66
- ISSN
- 2053-4019 (ISSN-L)
- 2053-4027
- OpenAlex
- W4392393520
- Cited by
- 3
- References
- 0
- Citations by year
- 2026: 1 · 2025: 1 · 2024: 1
- FWCI
- 1.06
- Type
- journal article
- Language
- en
- Open access
- hybrid
- doi.org
- Licence
- cc-by
- Locations
- European Journal of Business and Innovation Research (publishedVersion, cc-by)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Market Dynamics and Volatility
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Monetary Policy and Economic Impact
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economics of Agriculture and Food Markets
- Keywords
- crude oil price shocks, inflation, exchange rates, naira depreciation, Nigeria, cost-push inflation, monetary policy, fiscal policy, oil revenue management
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
Are you an author, or do you see a problem with this page? Request a review
