Framework for Natural Gas Performance Evaluation in Nigeria

Abstract

For the purpose of proper economic planning, there is need for the gas industry in Nigeria to increase output by increasing its efficiency with given gas reserves. In this paper, a framework named the uncertain DEA plus is developed for the technical efficiency evaluation of the gas sector in Nigeria incorporating uncertainty in data from 2010 to 2018; since uncertainty is an intrinsic part of data. The framework is built on the uncertain DEA model with the inclusion of a correlation that assigns efficiency scores at different confidence levels based on the summation of slacks. The results of the analysis with natural gas reserves set as the input variable, gas production and gas utilized set as output variables shows that both gas production and gas utilization in Nigeria are still at a minimal stage; and drastic action in the form of policy formulation is urgently needed. The application of uncertain DEA plus for technical efficiency evaluation prior to policy enactment will give better policies and implementation strategies for increased gas production and gas utilization in Nigeria.