The influence of petroleum products consumption towards economic growth in Malaysia / Nur Syuhadah Tumiran, Nurul Naim Kamarul Baharin and Siti Nursyahira Shahrom

Malaysia is one of the world’s leading petroleum producing countries. Hence, petroleum products plays a vital part in economic growth. However, due to falling prices by the failure of the oil producer, Malaysia confronting an issues that may affect the gross domestic profit. Therefore, this study aims to examine the existence of co-integrated relationship between petroleum products and economic growth, also to determine the existence of causality of petroleum products consumption and economic growth in Malaysia. The study employs annual data covering the period 1980-2018. Tests for unit root, Johansen co-integration and Granger causality are presented. The overall results proved that at least five types of petroleum products co-integrated with economic growth. It is also been proved that there are unidirectional relationship between GDP and LPG, diesel and motor petrol. This means that most of petroleum products consumption have influence towards economic growth. Thus, Malaysia should endeavor more opportunities with the petroleum consumption to help the economic growth more in future.