Modelling Petroleum Prices in Tanzania: A Comparative Analysis between ARIMA and Holt’s Method
Petroleum is one of the vital sources of energy for economic activities and the most traded commodity worldwide. It is crucial to industry and civilization and as it meets a substantial portion of the world's energy requirements, it has a big impact on global politics and intergovernmental rela...
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| Format: | Article |
| Language: | English |
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Mashhad: Behzad Hassannezhad Kashani
2023-10-01
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| Series: | International Journal of Management, Accounting and Economics |
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| Online Access: | https://www.ijmae.com/article_181630_dd05ddfa892a1a21ce7eb2a8a8f0fc23.pdf |
| _version_ | 1797580232458240000 |
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| author | Laban Gasper George Abrahamu |
| author_facet | Laban Gasper George Abrahamu |
| author_sort | Laban Gasper |
| collection | DOAJ |
| description | Petroleum is one of the vital sources of energy for economic activities and the most traded commodity worldwide. It is crucial to industry and civilization and as it meets a substantial portion of the world's energy requirements, it has a big impact on global politics and intergovernmental relations. Given the importance of oil to the economy, projecting crude prices has received a lot of focus in the literature. The primary goal of this research is to assess how well Holt's technique and Autoregressive Integrated Moving Average (ARIMA) forecast the petroleum prices in Tanzania. To determine whether the model is more reliable at predicting the prices of petrol in Tanzania, a comparative analysis was perfumed. Monthly data on petroleum prices were extracted from the bank of Tanzania website between February, 2004 to May, 2023. The mean absolute percentage error (MAPE), mean absolute error (MAE), and mean squared error (MSE) were used to evaluate the predictive ability of the ARIMA and double exponential smoothing models. The findings indicated that ARIMA (1,1,1) outperformed double exponential smoothing model for forecasting the prices of petrol in Tanzania. The result of this study will guide policy makers and investors in the energy sector to make wise decisions through accurate prediction of the price of petroleum in the future. |
| first_indexed | 2024-03-10T22:47:15Z |
| format | Article |
| id | doaj.art-59c5cb0a55ae4be78119740cb4299816 |
| institution | Directory Open Access Journal |
| issn | 2383-2126 |
| language | English |
| last_indexed | 2024-03-10T22:47:15Z |
| publishDate | 2023-10-01 |
| publisher | Mashhad: Behzad Hassannezhad Kashani |
| record_format | Article |
| series | International Journal of Management, Accounting and Economics |
| spelling | doaj.art-59c5cb0a55ae4be78119740cb42998162023-11-19T10:34:57ZengMashhad: Behzad Hassannezhad KashaniInternational Journal of Management, Accounting and Economics2383-21262023-10-0110964465710.5281/zenodo.10064237181630Modelling Petroleum Prices in Tanzania: A Comparative Analysis between ARIMA and Holt’s MethodLaban Gasper0George Abrahamu1Department of ICT and Mathematics,. College of Business Education (CBE), P.O. Box 2077, Dodoma, TanzaniaDepartment of ICT and Mathematics,. College of Business Education (CBE), P.O. Box 2077, Dodoma, TanzaniaPetroleum is one of the vital sources of energy for economic activities and the most traded commodity worldwide. It is crucial to industry and civilization and as it meets a substantial portion of the world's energy requirements, it has a big impact on global politics and intergovernmental relations. Given the importance of oil to the economy, projecting crude prices has received a lot of focus in the literature. The primary goal of this research is to assess how well Holt's technique and Autoregressive Integrated Moving Average (ARIMA) forecast the petroleum prices in Tanzania. To determine whether the model is more reliable at predicting the prices of petrol in Tanzania, a comparative analysis was perfumed. Monthly data on petroleum prices were extracted from the bank of Tanzania website between February, 2004 to May, 2023. The mean absolute percentage error (MAPE), mean absolute error (MAE), and mean squared error (MSE) were used to evaluate the predictive ability of the ARIMA and double exponential smoothing models. The findings indicated that ARIMA (1,1,1) outperformed double exponential smoothing model for forecasting the prices of petrol in Tanzania. The result of this study will guide policy makers and investors in the energy sector to make wise decisions through accurate prediction of the price of petroleum in the future.https://www.ijmae.com/article_181630_dd05ddfa892a1a21ce7eb2a8a8f0fc23.pdfarimaholt’smodelpetroleumsmoothing |
| spellingShingle | Laban Gasper George Abrahamu Modelling Petroleum Prices in Tanzania: A Comparative Analysis between ARIMA and Holt’s Method International Journal of Management, Accounting and Economics arima holt’s model petroleum smoothing |
| title | Modelling Petroleum Prices in Tanzania: A Comparative Analysis between ARIMA and Holt’s Method |
| title_full | Modelling Petroleum Prices in Tanzania: A Comparative Analysis between ARIMA and Holt’s Method |
| title_fullStr | Modelling Petroleum Prices in Tanzania: A Comparative Analysis between ARIMA and Holt’s Method |
| title_full_unstemmed | Modelling Petroleum Prices in Tanzania: A Comparative Analysis between ARIMA and Holt’s Method |
| title_short | Modelling Petroleum Prices in Tanzania: A Comparative Analysis between ARIMA and Holt’s Method |
| title_sort | modelling petroleum prices in tanzania a comparative analysis between arima and holt s method |
| topic | arima holt’s model petroleum smoothing |
| url | https://www.ijmae.com/article_181630_dd05ddfa892a1a21ce7eb2a8a8f0fc23.pdf |
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