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Determinants of the Dynamics of Demand for Highway Transportation Fuel in Nigeria

The major problem with the existing forecasts of demand for highway transportation fuel in Nigeria is often assumed to be associated with poor identification of the factors of mobility upon which they are based. This may have been one of the factors responsible for continued shortfall in supply for highway transportation fuel in the country. The goal of this study was to determine the mobility factors and their effects on the dynamics of demand for highway transportation fuel in Nigeria. Four cities in Nigeria were chosen for this study on a representative basis of size, function and location. The cities are Lagos, Kano, Abuja and Enugu. A total sample size of 3800 questionnaires, representing 1 per cent of the sample frame of 3,800,000 vehicles, drawn using stratified random sampling technique from the four selected cities, were distributed among vehicle operators. A total of 2713 questionnaires representing 71.3 per cent were returned. Multiple linear regression was used to test the research hypothesis. The result suggests that the demand for highway transportation fuel was significantly related to the four of the eight mobility factors studied at 0.01 level (R2 = 0.975). These are real price of fuel, stock of vehicles, time spent in purchasing fuel and fuel subsidy. The data analysed readily fitted into a multiple linear regression model. The study showed that these four variables are significant in determining the demand for highway transportation fuel in Nigeria. The outcome of this study was useful in enhancing future public policy on fuel demand in Nigeria.