THE EFFECT OF THE INCREASED PREMIUM MOTOR SPIRIT (PMS) PRICE AND INFLATION ON SMALL AND MEDIUM ENTERPRISES IN YOLA NORTH LOCAL GOVERNMENT AREA, ADAMAWA STATE

Abstract

This paper examines the effect of increased Premium Motor Spirit price (PMS) on Small and Medium Enterprises in Yola North Local Government area, Adamawa State. Therefore, the paper's main objectives are to determine the causes of the increase in the Premium Motor Spirit (PMS) Price and its economic effects on Small and Medium Enterprises in the Yola North Local Government area. The study employed the survey design research, in which a questionnaire was used to draw data for the study. The instrument was designed as a structured questionnaire with only two responses: Agreed or Disagreed. The study population consists of seven thousand (7000) enterprises operating in the Yola North. The study adopted the random sampling were two hundred and one respondents (201) are selected randomly. The reliability coefficient of the questionnaire was calculated to be 0.85 using the One Simple Test Correlation Coefficient. The Statistical Package for Social Sciences (SPSS) was used to analyse the data. The data is analysed and presented in tables in mean, standard deviation, and variance.The study discovered that the increased Premium Motor Spirit and inflation were caused by the government policies centred on the deregulation of the economy. The study also discovered that the increased Premium Motor Spirit and inflation adversely affect the Small and Medium Enterprises (SMEs). Therefore, the paper recommended that government should improve the fiscal and monetary policies to address inflation, repairing and installing new refineries at each part of Nigeria, loan facilities to SMEs and each doing business in Nigeria.