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COVID-19 Pandemic: The Impacts of Crude Oil Price Shock on Nigeria’s Economy, Legal and Policy Options

Author

Listed:
  • Olusola Joshua Olujobi

    (Department of Public and International Law, College of Law, Afe Babalola University, Ado Ekiti 360101, Nigeria)

  • Elizabeta Smaranda Olarinde

    (Department of Private and Business Law, Former Provost, College of Law, Vice-Chancellor, Afe Babalola University, Ado Ekiti 360101, Nigeria)

  • Tunde Ebenezer Yebisi

    (Department of Private and Business Law, Provost, College of Law, Afe Babalola University, Ado Ekiti 360101, Nigeria)

  • Uchechukwu Emena Okorie

    (Department of Economics and Development Studies, Covenant University, Ota 112233, Nigeria)

Abstract

The outbreak of the COVID-19 disease has gravely shaken the world economy. The economies of many countries have come under severe strain; Nigeria’s petroleum industry has been particularly affected. This has threatened the countries’ budgets and other essential needs involved in citizens’ welfare. The government is taking drastic measures to combat this scourge, with few results. This study adopts a doctrinal legal research approach and considers both the primary and secondary sources of law, such as judicial precedents, international conventions, and peer-reviewed journals. Legal theories were also applied as an academic lens for modelling the research. The justification for using the method was to establish the trustworthiness of the findings on the impacts of crude oil price shock on Nigeria’s economy, its legal and policy options. This study investigates the influences of oil price shock on the country’s economy and the legal remedies required to build economic resilience to mitigate future contingencies. The study argues that the provisions of the extant laws can be utilised as a preventive mechanism for tackling the impacts of oil price shock on Nigeria’s economy. The study recommends other remedial measures, such as diversification from oil and gas to non-oil sectors. The study designed a hybrid model for mitigating the influences of crude oil prices on the country’s extractive wealth. The study advocates for the need for an effective legal regime to shield the domestic economy from international oil price instability. The implications of the main results are that crude oil production and prices play a significant role in real growth enhancement. However, they exert a negative but unsustainable standard innovation on growth, which could be mitigated through appropriate legal and policy options. Nigeria needs stringent, transparent, and the best petroleum management practice laws to manage its petroleum sector’s revenues for sustainability.

Suggested Citation

  • Olusola Joshua Olujobi & Elizabeta Smaranda Olarinde & Tunde Ebenezer Yebisi & Uchechukwu Emena Okorie, 2022. "COVID-19 Pandemic: The Impacts of Crude Oil Price Shock on Nigeria’s Economy, Legal and Policy Options," Sustainability, MDPI, vol. 14(18), pages 1-20, September.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:18:p:11166-:d:908269
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    References listed on IDEAS

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    1. Olusola J. Olujobi & Olabode A. Oyewunmi & Adebukola E. Oyewunmi, 2018. "Oil Spillage in Nigeria s Upstream Petroleum Sector: Beyond the Legal Frameworks," International Journal of Energy Economics and Policy, Econjournals, vol. 8(1), pages 220-226.
    2. Aare Afe Babalola & Damilola S. Olawuyi, 2022. "Overcoming Regulatory Failure in the Design and Implementation of Gas Flaring Policies: The Potential and Promise of an Energy Justice Approach," Sustainability, MDPI, vol. 14(11), pages 1-17, June.
    3. Giraud, Pierre-Noel, 1995. "The equilibrium price range of oil : Economics, politics and uncertainty in the formation of oil prices," Energy Policy, Elsevier, vol. 23(1), pages 35-49, January.
    4. Olusola Joshua Olujobi & Tunde Ebenezer Yebisi & Oyinkepreye Preye Patrick & Afolabi Innocent Ariremako, 2022. "The Legal Framework for Combating Gas Flaring in Nigeria’s Oil and Gas Industry: Can It Promote Sustainable Energy Security?," Sustainability, MDPI, vol. 14(13), pages 1-20, June.
    5. Riccardo De Blasis & Filippo Petroni, 2021. "Price Leadership and Volatility Linkages between Oil and Renewable Energy Firms during the COVID-19 Pandemic," Energies, MDPI, vol. 14(9), pages 1-16, May.
    6. Olusola Joshua Olujobi & Olabode Adeleke Oyewunmi, 2017. "Annulment of Oil Licences in Nigeria s Upstream Petroleum Sector: A Legal Critique of the Costs and Benefits," International Journal of Energy Economics and Policy, Econjournals, vol. 7(3), pages 364-369.
    7. Yanhong Feng & Dilong Xu & Pierre Failler & Tinghui Li, 2020. "Research on the Time-Varying Impact of Economic Policy Uncertainty on Crude Oil Price Fluctuation," Sustainability, MDPI, vol. 12(16), pages 1-24, August.
    8. C. Baumeister & G. Peersman & -, 2010. "Sources of the Volatility Puzzle in the Crude Oil Market," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 10/634, Ghent University, Faculty of Economics and Business Administration.
    9. Olabode A. Oyewunmi & Olusola J. Olujobi, 2016. "Transparency in Nigeria s Oil and Gas Industry: Is Policy Re-engineering the Way Out?," International Journal of Energy Economics and Policy, Econjournals, vol. 6(3), pages 630-636.
    10. Jin Shang & Shigeyuki Hamori, 2020. "The Response of US Macroeconomic Aggregates to Price Shocks in Crude Oil vs. Natural Gas," Energies, MDPI, vol. 13(10), pages 1-17, May.
    11. Olusola Joshua Olujobi & Daniel E. Ufua & Uchechukwu Emena Okorie & Mercy E. Ogbari, 2022. "Carbon emission, solid waste management, and electricity generation: a legal and empirical perspective for renewable energy in Nigeria," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 22(3), pages 599-619, September.
    12. Jiaying Peng & Zhenghui Li & Benjamin M. Drakeford, 2020. "Dynamic Characteristics of Crude Oil Price Fluctuation—From the Perspective of Crude Oil Price Influence Mechanism," Energies, MDPI, vol. 13(17), pages 1-19, August.
    13. Olusola Joshua Olujobi, 2020. "RETRACTED: Analysis of the Legal Framework Governing Gas Flaring in Nigeria’s Upstream Petroleum Sector and the Need for Overhauling," Social Sciences, MDPI, vol. 9(8), pages 1, July.
    14. Olusola Joshua Olujobi & Elizabeta Smaranda Olarinde & Tunde Ebenezer Yebisi, 2022. "The Conundrums of Illicit Crude Oil Refineries in Nigeria and Its Debilitating Effects on Nigeria’s Economy: A Legal Approach," Energies, MDPI, vol. 15(17), pages 1-15, August.
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