Chapter One — 1.1 Background to the Study

Oil Price Volatility has increasingly attracted the attention of researchers, regulators, and practitioners concerned with household welfare. This growing interest reflects the recognition that oil price volatility does not operate in isolation, but interacts with a wider set of institutional and market conditions found within the Federal Capital Territory, Abuja.

the Federal Capital Territory, Abuja presents a useful setting for examining this relationship precisely because the conditions there — structural, regulatory, and behavioural — differ from those typically assumed in the broader literature, most of which draws on evidence from more developed economies.

1.2 Statement of the Problem

While oil price volatility is widely discussed in policy and industry circles, empirical evidence on its actual effect on household welfare within the Federal Capital Territory, Abuja remains sparse and, in places, contradictory. This lack of localized, rigorous evidence makes it difficult for decision-makers to know with confidence whether current approaches to oil price volatility are helping or hindering household welfare — a gap this study sets out to close.

1.3 Objectives of the Study

1. To examine the effect of Oil Price Volatility on household welfare in the Federal Capital Territory, Abuja.
2. To assess the extent to which oil price volatility influences household welfare within the study area.
3. To identify the challenges associated with oil price volatility in relation to household welfare.
4. To recommend strategies for optimizing oil price volatility in order to improve household welfare.

1.4 Research Questions

1. What is the effect of oil price volatility on household welfare in the Federal Capital Territory, Abuja?
2. To what extent does oil price volatility influence household welfare within the study area?
3. What challenges are associated with oil price volatility in relation to household welfare?
4. What strategies can be adopted to optimize oil price volatility in order to improve household welfare?

1.5 Significance of the Study

This study is significant to a range of stakeholders. For policymakers and regulators, the findings offer evidence to guide the design of frameworks that support healthier outcomes around household welfare. For managers and practitioners within the Federal Capital Territory, Abuja, the study provides practical insight into how oil price volatility can be better managed. Finally, it contributes to the academic literature on economics by extending existing knowledge into a specific empirical context, and offers a reference point for future researchers.

1.6 Scope of the Study

The study is limited to an examination of Oil Price Volatility and its relationship with household welfare within the context of the Federal Capital Territory, Abuja. It reflects a clearly defined scope of analysis and relies on data and perspectives available within that scope; generalizing the findings beyond this specific context should therefore be done with appropriate caution.