Effect of Petroleum Price Increase on Cost of Selected Building Finishing Materials in the Nigerian Construction Industry (2006-2012)

Abstract

It has been noted that a panacea to the problem of housing in Nigeria is the persistent increase in the prices of building materials. This in turn increases cost of construction due to increase in prices of petroleum products which results in variation and fluctuation of market prices of materials for construction projects. Finishing materials are exceptionally affected because they carry significant cost proportion of building projects. In view of this, the paper was aimed at examining the influence of petroleum price increase on the prices of some selected building finishing materials in Niger State from 2006-2012 in the light of high construction cost in the Nigerian Construction Industry. The data collected were based on three basic finishing materials, which are floor tiles, gloss/emulsion paints and ceiling boards, with different alternatives for each finishing material. Correlation and Regression Analyses used to analyze the collected data showed some level of high significance between the independent variable (regulated petroleum prices) and the dependent variables (finishing materials), i.e. Coefficient of Determination of values ranging from 61% to 90%. It was concluded that increased in regulated price of petroleum products accounts for high cost of finishing materials in the building projects. One of the recommendations from the study included the need for a better regulating price system to adequately monitor price with regard to building materials.