Estimating Natural Gas Demand Elasticities in Nigeria

Abstract

This study estimated natural gas demand elasticities in Nigeria. The objective of the study was to examine the responsiveness of natural gas demand to changes in price of natural gas, income and prices of other energy products. The study adopted the bound testing approach to    cointegration within the framework of ARDL to estimate annual time series data over a period of 33 years (1984 – 2016). The findings of this research showed that the elasticity of natural gas demand is relatively price inelastic in both short and long run; cross-price elasticity of gas demand revealed that AGO and LNG are substitute energy products for natural gas in Nigeria; while the estimate of income elasticity of demand is not statistically significant in the short and long run.