Effects of Increase in Petrol (PMS) Pump Price on the Prices of Selected Building Materials in Nigeria (1990-2009)

Abstract

This paper examines the effects of increase in fuel price on the prices of selected building materials in Nigeria. The objective is to determine the relationship existing between fuel price increase and the price of selected basic building materials. Using a simple interactive polynomial technique and working at 95% confidence limit a computation was made of the research variables. The result showed a significant relationship between the variables tested. Prices of cement, blocks and paint had linear, quadratic and cubic relationships respectively with increase in fuel price. Coefficients of determination of 93.02% for cement, 92.89% for blocks and 94.52% for paints were found for these tested variables. The results of the study indicate that the relationships were either linear or non linear in the tested variables. This demonstrates that petrol increase will cause the price of building materials to rise at various degrees, thereby exerting an enormous financial pressure on the building developers. Government fuel price hike policies should be considerate. This paper concludes that adequate and appropriate measures should be put in place to forestall rise in prices of building materials.