Impact of Change in Oil Market Price on the Price of Selected Building Materials in Kaduna State

Abstract

Past studies have discovered that high cost of construction is a major problem in the Nigerian construction industry. Therefore an increase in cost of construction projects is due to increase in price of petroleum products. This research therefore assessed the impact of oil market prices on the prices of building materials in Nigeria. Data were collected using questionnaire and checklist. Data obtained were analyzed using Relative Important Index, and simple linear regression. Data and results were presented using bar charts and tables. Findings from the study revealed that there was inconsistent annual increase in price of petrol from year 2000 to 2015. The descriptive analysis shows that change in petrol price lead to change in price of building materials. The result of the regression analysis shows that there exists a strong, positive and significant relationship between the price of petrol and prices of building materials. The null hypothesis was therefore rejected. Furthermore, it was stated that Exchange Value of Dollar was the major cause of changes in oil price and Promoting Competition was revealed as the major way of controlling oil price in Nigeria. It was concluded that change in oil market price has significant impact on the price of building materials. It was recommended that there should be a regulation on the price of petrol and building materials; that is minimum and maximum price legislation should be established in order to control the price of building materials.