A CASE STUDY OF NNPC ENUGU AND PORT-HARCOURT
1.1 BACKGROUND OF THE STUDY
Pipeline transportation is the youngest among the other means of transportation in Nigeria. It has not received much attention because of two major factors. One is that it is relatively a recent origin. Two is the its operations and services are not in the hands of private individuals and companies. Hence everything about pipeline transportation in Nigeria is strictly in the hands of the federal government.
According to Kupoheyi (2000) pipelines have been in use for transporting materials for centuries. Hence in the urban areas, pipelines are used for distributing potable water. Though the pipelines network for the transportation and distribution of water in urban areas are usually short, they uses the same basic principles as the ones for distributing petroleum products. The point to note here is that pipelines were first used for distributing water. Later they were used for mooring gases and a variety of liquids within plants, between plants, as well as between locations for apart. Today pipelines are widely used for transporting petroleum products and some solids that are suspended in liquids over long distances.
Olakunori (2000) reported that petroleum pipelines made only recent discovery into Nigeria. According to him, the products pumped through the Nigeria pipelines include the following
– Premium motor spirit (PMS) otherwise know as petrol;
– Automotive Gas Oil (AGO), otherwise known as diesel;
– Household Kerosene, (HHK).
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In addition to these, avaiation turbine kerosene (ATW, otherwise known as avgas, is often pumped from Mosimi to Ikeja Airport regularly. Pumping is usual done in butches of between 15000 to 50000 cubic meters in such a way as to avoid contamination. Delivery of the various products grades into storage is strictly monitored and controlled from the control centres located in Mosimi, Warri, Kaduna, and Port Harcourt. Once pumping begins and a product leaves the refinery tanks, its arrival time at any particular depot can easily be forecasted. (Olusunmade, 2001).
Liquefied natural gas (LPG) is pumped through the Escravos – Lagos Pipeline (ELP) dedicated to gas. This, at present, is the only operational gas pipeline that has been completed in the country (Adeyinka, 2000). According to Udensi (1999) the Nigeria government intends to extend the gas pipeline to other West African countries in order to encourage gas utilization and exploit the commercial opportunities in the sub-region. Some of these countries in this regard include.
– Benin Republic
– Sierra Leone
– Burkina Faso
– Cape Verde
– Guinea and Chad.
Ike (1999) stated the construction of phases I-III pipeline systems enabled the Nigerian government to achieve the following objectives.
– Benin city
– Kaduna (Product depots)
– Port Harcourt (Product depots)
– Warri (Product depots)
II. Provision of additional distribution depots at Suleja, and Minna
III. Connection of Kaduna Refinery products depot with the refineries a Port Harcourt and Warri, not only to make up the production shortfall there, but also to ensure the continued supply of products to the northern areas in the event of Kaduna Refinery outage.
IV. Construction of facilities to enable products to be pumped from Port-Harcourt to the Western areas via Benin, not only to augment Warri Refinery production, but also to continue supplies in the event of total outage.
V. The de-bottlenecking of limited capacity of the existing 6 inches diameter pipelines between Jos and Gombe.
VI Putting in place some alterations, upgrades and repairs within the existing system necessary to accommodate the new facilities.
In addition, with the completion of the nation’s pipeline interlink project, the total route of Nigeria’s products distribution pipelines and depots complex has grown to 4,950 Kilometers. This is made up of pipelines of various diameters linking twenty storage depots.
1.2 STATEMENT OF THE PROBLEM
Pipelines has been identified as been vital for efficient transportation and distribution of petroleum products, Although Nigeria had completed and commissioned phases I-III pipeline system, the nation had, on man occasional, suffered from petroleum products scarcity which ahs caused untold hardship to the masses. In addition, the country’s mass media had, on many occasions, carried sad news relating to the victims of kerosene explosions and other related home accidents caused by petroleum products. Al thee are evidences of inefficiency in the operation and management of the nation’s pipeline system. Had the construction of pipeline facilitated the distribution of petroleum product in Nigeria? What are the strategies for improving the nation’s pipeline system? These questions present the problems that necessitated this research.
1.3 OBJECTIVES OF THE STUDY
The objectives of this research are as follows:
i. To examine the relevance of pipelines to the efficient distribution and marketing of petroleum products in Nigeria.
ii. To identify the constraints/problems of pipeline transportation of petroleum products in Nigeria
iii. To suggest realistic solutions to thee problems
iv. To highlight the strategies for improving on the nation’s pipelines so as to ensure efficient marketing of petroleum products in the country.
- RESEARCH HYPOTHESES
The following hypotheses were tested in this study/research:
H0: Pipelines are not reliable means of distributing and marketing petroleum products. in Nigeria.
H1: Pipelines are highly reliable means for distributing and marketing of Petroleum products in Nigeria.
H0: Pipelines do not reduce the cost of transporting and marketing petroleum products in Nigeria.
H1: Pipelines reduce the cost of transporting and marketing petroleum products in Nigeria.
H0: Pipeline vandalizations do not impede the effective use of pipelines for distribution and marketing of petroleum products in Nigeria.
H1: Pipelines vandalization impedes the effective use of pipelines for the distribution and marketing of petroleum products in Nigeria.
H0: The use of alarm systems and police patrol will not reduce the incidence of pipeline vandalization in Nigeria.
H1: The use of alarm system and police patrol will reduce the incidence of pipeline vandalization in Nigeria.
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1.5 SIGNIFICANCE OF THE STUDY
The findings and recommendations to be made in this study, when implemented, will benefit all Nigerians as well as the government. For one thing, the implementations of the recommendations of this study will reduce the incidence of pipeline vandalization in Nigeria. In addition, the problem of fuel scarcity will equally be eliminated. Thus the average Nigeria will have access to petroleum products at a reduces cost anytime, anywhere. Also the incidence of kerosene explosion will become a thing of the past.
1.6 SCOPE AND DELIMITATIONS OF THE STUDY
The scope of this study borders on pipeline transportation and its relevance to the marketing of petroleum products. This research will be limited to the Enugu and Port Harcourt offices of the Nigeria National Petroleum Corporation (NNPC).
This chapter contains relevant literature as regards pipeline transportation and the marketing of petroleum products in Nigeria. Specifically this chapter contains the following:
1. Historical Development of Pipeline Transportation,
2. The Features of Pipeline Transportation
3. Pipeline Transportation and the Marketing of Petroleum Products in Nigeria.
4. Impediments to Pipeline Transportation in Nigeria
5. Prospects of Pipeline Transportation in Nigeria.
2.1 HISTORICAL DEVELOPMENTS OF PIPELINE TRANSPORTATION
Henry and Miller (1977) reported that the first pump-operated petroleum pipelines were built in the United States of America in 1863. They also noted that the first petroleum product lines appeared there in the 1920s. According to them, by 1960, the network of petroleum pipelines in the United States totaled over 300,000 kilometers. The network has been expanding annually, as petroleum gains more and more prominence as a source of energy.
As a result of the acceptance of the recommendations of the Oputa panel of Enquiry of 1975, the Federal Government of Nigeria took over the importation of petroleum products into the country through the NNPC. In addition, it also began work on the construction of refining and storage facilities and pipelines to link these storage centres (Ndu, 1998). Thus the 125,000 barrels per day capacity Warri Refinery was constructed and commissioned in 1987. The phases 1 and II pipeline systems along with 17 storage depts. Were commissioned in 1979. The 110,000 barrels per day capacity Kaduna Refinery was also built and finally commissioned in 1980. Government commitment to the pursuit of self-sufficiency in refined petroleum products led to additional investment in the expansion of old Port Harcourt Refinery to 60,000 barrels per day, the construction and commissioning of the new 150,000 barrels per day capacity Port Harcourt Refinery in 1989, and the phase III Pipelines and depots interlinks in 1995 (PPMC, 1998).
The pipeline phase III project was embarked upon in order to provide an interlink network for the nation’s pipelines and depts. The phases I and II of the nation’s gigantic pipelines and depots’ projects were concluded between 1979 and 1980. But lack of interlink facilities did not allow consumers to enjoy the full benefits of the project. Hence the prime objective that motivated the prosecution of the pipeline phase III project in 1991 was that of expansion and integration of the existing pipeline system into national grid of product pipelines, with the view of improving the network’s capacity, operational flexibility and reliability. The expansion of the pipelines network together with the construction of storage facilities were thus aimed at satisfying a minimum of 45 days’ local demand for normal operations up to the year 2010 (Olakunori, 2000).
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Table 2.1 contains the summary of the Nigerian petroleum products pipelines network. The pipeline network in Nigeria, as shown in table 2.1, is classified into five basic systems, referred to as systems 2A,
Table 2.1 – Characteristics of the Nigeria Products Pipeline Network
|System||Pipeline Segment||Length (Km)||Flow Rate (M3/Hr)|
|2A||Warri – Benin||90||300|
|Benin – Ore||114||300|
|Ore – Mosimi||151||300|
|2AX||Auchi – Benin||107||380|
|2B||Atlas cove – Mosimi||40||750|
|Mosimi – Ibadan||79||300|
|Ibadan – Ilorin||128||60|
|Mosimi – Ikeja (ATK)||75|
|Mosimi – Lagos satellite|
|2C||Warri-Kaduna (crude oil)||606||150|
(Source: PPMC, 1998)
2B, 2C, 2D, and 2E. Added to these are four sub-systems, which are actually extensions of the basic systems. These are sub-systems 2AC, 2CX, 2DX and 2EX. Pipeline system 2A runs from Warri through Benin and Ore Depots and terminates at Mosimi Depots. System 2EX originates at Port-Harcourt runs through Aba and Enugu Depots, up to Maukurdi terminate at Yola Depot.
The evacuation of refined petroleum products by pipelines stood at 70 per cent of production before the completion of the interlink, while water, road and rail transportation modes shared the remaining 30 per cent among themselves. It is expected that when the commissioned interlink system becomes well-established, the bridging (use of road tankers for transportation) of white petroleum products would stop. This would help to save the nation enormous transportation costs and the wear and tear of highway infrastructure.
2.2 The features of pipeline Transportation
the peculiar features of pipeline transportation in Nigeria would, at this juncture, be examined under the following sub-headings:
* Relationship with other modes of transport
* Availability to the general public
* Number of operators
* Carriage and track facilities and
* Motive power.
As regards ownership, it is important to note that in Nigeria, the pipeline is the property of the federal governments and is managed by the pipelines and products marketing company (PPMC) which is a parastatal (Ajayi, 1998). The products transported through the network are also owned by PPMC, on behalf of the Federal government. This is unlike what is obtained in the united State of America (U.S.A)where the pipeline are almost entirely owned by the private sector. There in the united States, the ownership of pipelines and ht products being transported are not always the same.
With regards to its relationship with other means of transport, it is equally important to note that pipeline transportation is often independent of other means of transportation. In other words, it can initiate the movement of goods and complete it all by itself (Ibegbu,1997). For instance, in Nigeria, the pipeline networks help to collect crude oil into storage tank, form where it is transported by pipelines to refineries. Further, from these refineries, pipeline convey the refined products to depots and to some users, such as the aviation users in Ikeja Airport.
In his views on the limitations of pipeline transportation, Ukiwe(1996) noted that pipelines are limited to the transportation of liquids gaseous materials. Solids that are transported by pipelines have to be dissolved or suspended in liquids. In Nigeria, the pipelines network is solely dedicated to petroleum products. This implies that pipelines are highly inflexible and limited in the range of materials they can be used for transporting.
In his views on the availability of pipelines to the general public, Nsidi (2000) stated that pipelines are not usually available for hiring by the general public. In Nigeria, the products pipeline network is entirely owned by the federal government and it is used by it (the federal government) and for its products alone. This is different from what is obtained in USA where the pipeline network is owned by the private sector and the users of the pipelines are usually the owned themselves.
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Pipelines transport services also have very few carriers or operators. In Nigeria there is only one carrier or operator, namely, the PPMC (Olakunori, 2000). Other nations of the world where pipeline transport services has few carriers include:
1. African countries such as:
– Equitorial Guinea
- South Africa
- Benin Republic
2. European nations, such as:
3. Latin American countries, such as:
In his views on the carriage and track facilities of pipeline services Olagunsoye (1997) stated that as regards pipeline transportation the track facilities (that is, the pipelines) are equally the carriage facilities. Hence the materials being transported (petroleum products) just flow through the pipes with the aid of powered pumps.
Finally, the motive power in pipeline transportation is stationary. This is in contrasts to other means of transportation (such as road, sea and rail) where the motive power moves long the track together with the carrying unit.
2.3 PIPELINE TRANSPORTATION AND THE MARKETING OF PETROLEUM PRODUCTS IN NIGERIA
Odoh (1998) reported that the use of pipelines for the transportation and marketing of petroleum products in Nigeria have many benefits/advantages. These advantages would be examined under the following sub-headings:
- Low environmental costs, and
As regards convenience, it is important to recall that pipeline transportation is the most convenient means of transportation for liquids and gases. As such its use for this purpose minimizes wastage, contamination, accidents and delays (Kupolnyi, 2000).
With regards to economy, Udensi (1999) stated that compared to other means of transportation, pipelines are the most economical. This is because, once the pipelines and pumps are installed, the operating and maintenance costs are very low.
As regards suitability, Adeyinka (2000) noted that pipeline transportation is the best means for transporting flowing materials (such as water and petroleum products) between two fixed locations. Handling costs and operational costs are minimized with the use of pipelines for achieving this end.
As regards safety, Olakunori (2000) stated that pipeline transportation affords the greatest safety to cargoes among the various modes of transportation. Accidents and explosions are few when pipelines are used for this purpose. Since the installation of product pipelines for petroleum transportation and marketing in Nigeria, accidents and destruction of lives and properties arising from the transportation of petroleum products have greatly reduced.
In his own views, Okeke (1990) stated that the cost of operating pipeline systems to the environment are very minimal. Land space requirements is lower than that of road and railway transportation, noise pollution is low. This accounts for its overwhelming preference for the transportation of petroleum products.
Ukiwe (1996) also observed that pipeline transportation is the most automated among the various modes of modern transportation. It supports the use of microwave communication and the electronic computer. This makes routing and scheduling of the arrival of products at terminals easy. Hence, since there is no traffic congestion, weather interference and interchanges, products arrive at destinations at scheduled time.
2.4 IMPEDIMENTS TO PIPELINE TRANSPORTATION IN NIGERIA
Okakunori (2000) enumerated some of the constraints to pipeline transportation in Nigeria. These include the following:-
- Difficulty in controlling wastage arising from damage to pipes
- Sabotage and pilferage
- Pollution and explosion due to damage to pipelines
- Heavy fixed and specialized investment
- Usage and user restrictions.
DIFFICULTY IN CONTROLLING WASTAGE ARISING FROM DAMAGE TO PIPES
Pipelines are normally not manned, even though they have to be inspected from time to time. In the event of damage to pipes, either as a result of accidents or sabotage, it would take much time to locate the point or spot of the damage. Before this is done and repair is effected, much wastage would have occurred.
SABOTAGE AND PILFERAGE
Sometimes, miscreants and saboteurs tamper with petroleum pipelines in the country in order to cause damage or steal products (such as during acute shortages). This often results in a lot of wastage and loss of lives. According to PPMC (2000), Nigeria lost up to N6 billion due to deliberate damage to its pipelines in the country between January and August 2000 alone. This problem has for some years now been intractable and had become very alarming to the Federal government.
Pollution and exposition due to damage to pipelines damages to pipelines (whether accidental or deliberate) cause a lot of pollution in the areas where they are laid. When such damages occur in refined product pipelines, they are usually accompanied by fire explosions and loss of lives and properties. The precautionary measure normally taken in order to prevent deliberate damage to pipelines and reduce the effects of such an occurrence is the burial of pipes many meters in the ground. But this is not always possible in some places, most especially across rivers and deep gullies. In the oil spillage from pipelines has become a daily experience. Crops and aquatic lives are lost as a result of this, leading to the impoverishment of the people. Actually, this is one of the major complaints of the indigenes of the Niger Delta areas of the country. It costs the oil-producing companies operating in these areas billions of naira to clean the environment and pay for the damages arising from oil spillages.
HEAVY FIXED AND SPECIALIZED INVESTMENT
Pipeline transportation requires a large investment in fixed specialized facilities. In a developing country such as Nigeria, private enterprises usually cannot mobilize such funds. Even the federal government does not find it easy to obtain the funds for such an investment. Otherwise, it would have extended the network beyond its present capacity.
USAGE AND USER RESTRICTIONS
Pipeline transportation in Nigeria is confined to petroleum products. The means that other industries and products cannot presently benefit directly from the nation’s pipeline network. In the same vein, the federal government (through the PPMC) is the sole owner and user of all the pipeline facilities in the country.
These restrictions on usage and users place some limitations on the potential benefits that the whole nation would have derived from pipeline transportation.
2.5 PROSPECTS OF PIPELINE TRANSPORTATION IN NIGERIA
The rate of local consumption of petroleum products in the country has steadily been increasing over the years. As the nation develops industrially and people become more affluent there is bound to be an increase in the rate at which this increase takes place. This is going to necessitate an increase in the pipeline network. Already five years after the completion and commissioning of the phase ill of its pipeline project, the PPMC is already feeling the strains of shortage. One of the best ways to solve the problem of petroleum products’ shortage is to increase the problem of petroleum product’s shortage is to increase the number of depots and pipeline network in order to bring the products nearer to consumers. Because of this, it is expected that the petroleum pipeline network in the country would soon witness another increase or expansion (Olakunon, 2000).
Despite all the calls being made for the federal government to privatize the Nigerian National Petroleum Corporation (NNPC) and its subsidiaries, it is not likely that the government would relinquish its shares in the PPMC to the private sector in the nearest future. Because of this, the federal government will still continue to be the sole owner of the pipelines network in Nigeria and the products it carries. Apart from the lures of the revenue which participation in petroleum products and business generates for the federal government, it enables it to have a firm grip on the economy. This means that the private sector will not likely be allowed to participate in pipeline transportation in the country in the nearest future (Adeyinka, 2000).
The Nigerian pipeline network will still remain solely dedicated to petroleum products (crude and finished products) for long. The companies requiring other products through pipeline transportation in the country are very few and their capacities are very low. The installation of pipelines for such companies would also be uneconomical. Moreover, as the situation stands in Nigeria today, only the government can easily obtain the land needed for the installation of pipelines. Owners of the plots of land through which pipelines would have to pass may not want to sell them or allow others to lay pipes through them. But under the Nigerian land law, the ultimate ownership of land is vested on the federal government. Hence government can revoke the certificate of occupancy of any plot of land at any time in order to acquire if for public use. This makes it easy for government to get land for its projects. But the private sector cannot always easily get land, most especially if the land is already developed. Because of this, pipeline transportation projects in Nigeria will still remain a government affair for long.
PROBLEMS OF PIPELINE VANDALIZATION/DAMAGE IN NIGERIA
From the discussions made in this chapter, it is clear that pipelines are the best facilities for transporting petroleum products. though by nature, pipelines have some general deficiencies, most of which have already being pointed out, some environmental factor in the country pose special problems to them. The most prominent of these are the accidental or unforeseen damages to crude oil pipelines (which result in spillages and environmental degradation) and the increasing occurrences of interference with the flow of the products by miscreants who break finished product pipelines with the purpose of stealing from them. The latter ahs led to great fire disasters, resulting in the death of hundreds of people. For example, the punch newspaper in July 2000 carried news captioned “10 fuel pipeline vandals Dic-Another ‘Jesse’ Disaster Looms” (Oladipo, 2000). According to the news, a fire explosion killed ten people who were attempting to steal premium motor spirit (PMS) from a pipeline which some others has already ruptured at sanke Beach, near Lagos. When the chairman of the local government council in which the incidence took place was alerted, he took some newsmen to the site. On their way, as reported in the newspaper, over 70 canoe paddlers were sighted heading to the sight, each carrying at least 15 jerrycan with which to steal from the ruptured pipe after some had died while attempting the same thing. Two years before this, a whole town (Jesse) was almost completely wiped out by the fire caused by the petroleum product that had spilled from a vandalized pipeline system. Such incidences are now common occurrence in the country.
The problem of pipeline vandalization is motivated mainly by the increasingly rising pump prices of petroleum products and the protracted shortages of the products. The rupturing of crude oil pipelines is more or less due to carelessness on the past of the officials who install and maintain them. For these problems to be solved, high punitive measures have to be meted to those found responsible for them. However, it is very much necessary to discover the occurrence of pipelines vandalization and damage quickly in order to be able to reduce the losses arising from them to be able to reduce the losses arising from them to the barest minimum. To this end, alarm systems would need to be installed and make to run through the whole pipeline network in the country in order to alert officials in cases of rupture, damage or interference to the pipelines. The system should be able to alert officials at the pumping or control stations and show them the spot of the incidence so that they can attend to them promptly. The officials who are to attend to the problem should include security men as well as those who are trained to give first aid solutions, pending the arrival of the experts who would clear the spilled products and repair the damaged pipeline facilities (Udenze, 2001).
An alternative measure which can be used to curb the problem of pipeline vandalization and oil spillage arising from the rupturing of pipelines is police patrol. A special police task force can be raised from among the regular force to patrol the pipelines network in the country on a regular basis. The members of the task force can be held responsible for any vandalization of pipelines which are not promptly arrested and treated according to laid down regulations. The cost of policing the nation’s pipeline network system would obviously be far less than the costs of the losses presently arising from the vandalization and accidental damage to the pipelines. However, such a policing measure should only be for a short time, pending the time a better and more permanent solution would be found.
2.6 SUMMARY OF THE RELATED REVIEWED LITERATURE
This chapter had reviewed the theoretical issues related to the topic of the study. This review brought to the limelight the fact that pipeline transportation of petroleum products started in the later 1970s as a result of the recommendations made by the Oputa Panel of Enquiry of 1975. The review also identified pipelines as the most convenient and economical means of transportation and marketing of petroleum products. this is because, once the pipelines and pumps are installed, the operating and maintenance costs are very low.
In addition to the above, this review also highlighted the impediments to pipeline transportation in Nigeria. These include the difficulty of controlling pollution and wastage arising from the damage to pipes, pipeline sabotage and vandalization by some criminals, and so on. Finally, this review suggested some strategies for eradicating the problem of pipeline vandalization, and these include the use of alarm system, and regular police patrol of the pipelines.
- This chapter described the procedure for the research on pipeline transportation and the marketing/distribution of petroleum products in Nigeria.
3.1 RESEARCH DESIGN
The survey research method was adopted by the researcher in this study. This method involves the gathering of information by making direct contact with the unit of study. the unit of study could individuals, organizations and or communities.
3.2 AREA OF STUDY
This study was carried out at the NNPC offices in Enugu and Port-Harcourt.
3.3 SOURCES OF DATA
The data used in this study was collected from the following sources.
- PRIMARY DATA: This includes those data which the research collected by means of questionnaire interviews.
- SECONDARY DATA: This include those data which the researcher collected from already documented records. The sources of data under this category include;
- Magazines and newspaper
- Unpublished project report
- Government publications
3.4 STUDY POPULATION
The target population consists of all the 488 staff of the NNPC offices in Enugu and Port-Harcourt. The size of the study population was obtained from the records of the office of personnel services of NNPC in Enugu and Port Harcourt.
3.5 SAMPLE SIZE AND SAMPLING METHOD
The size of the study sample was calculated using the following formula.
n = N
1 + N(e)2
Where n = the required sample size
N = target population
I = a constant
e = Sampling error
For this study we have that:
N = 488
e = 10% or 0.10
\ n = 488
1 + 488 (0.10)2
1 + 4.88
i.e n = 488 = 82.99 = 83 staff
The 83 staff was selected using the simple random sampling method.
3.6 INSTRUMENT FOR DATA COLLECTION
The instrument for data collection was a structured questionnaire. This consists of a list of questions relating to the aims of the study and the hypothesis to be tested to which the respondent is required to answer by writing his responses. This questionnaire has the following features:
- Questions that are not relevant to the research are excluded
- Offensive questions are avoided
- Lead questions i.e questions that could influence the replies of the respondent, are avoided.
- The questions are set out in logical sequence
- The questionnaire includes a covering letter in which the object of the enquiry is explained to the respondent and his co-operation solicited.
The questionnaire has two sections – A and B.
Section A contain the personal data of the respondents (such as age, sex, etc) while section B contain the general questions which reflect the aims and objectives of the study.
3.7 VALIDITY OF THE INSTRUMENT
Both face and content validity of the instrument (the questionnaire) was obtained by submitting its initial draft to three lecturers of the department of marketing of Enugu State University of Science and Technology (ESUT). These professionals were asked to vet the instrument in terms of sentence construction, sequential arrangement of the questions, relatedness of the questions to the aims of the research etc. Their useful comments were embodied in the final draft of the instrument before it was used for data collection.
3.8 RELIABILITY OF INSTRUMENT
Test, re-test was administered at different times with obtained results considered over the firms and this proved the reliability of the instrument.
3.9 METHOD OF DATA COLLECTION
The research personally distributed the questionnaires to the 83 respondents. The respondents were given one week to complete the questionnaires before they were collected and collated in readiness for data analysis.
3.10 METHOD OF DATA ANALYSIS
The response made on the questionnaires was analyzed using percentages and chi-square tests. The chi-square statistic is computed thus:
X2 = å (O – E)2
Where X2 = Chi square
å = summation sign
O = Observed frequency
E = Expected frequency
DATA ANALYSIS AND RESULTS
In this chapter, the researcher presented the bulk of the data collected for this study.
4.1 DATA ANALYSIS
Table 4.1 – 4.3 show the demographic characteristics of the respondents used as the study sample.
TABLE 4.1: SEX OF RESPONDENTS
Source: Field Survey, 2004
Table 4.1 showed that 84.3% of the Respondents are the male staff of NNPC while 15.7% of them are the female staff.
TABLE 4.2: AGE OF RESPONDENTS
|S/N||Age (in years)||Frequency (F)||Percentage %)|
|a.||20 – 30 years||15||18.1|
|c.||Above 40 years||8||9.6|
Source: Filed Survey, 2004
Table 4.2 showed that 18.1% of the Respondents fell within the age bracket of 20 -30 years, 72.3% fell within the age bracket of 31-40 years; and 9.6% of them are above 40 years.
TABLE 4.3 OCCUPATIONAL STATUS OF RESPONDENTS
|a.||Senior staff e.g Directors, Managers (marketing ) etc||48||57.8|
|b.||Junior staff e.g maintenance technicians etc||10||12.0|
Source: Field Survey, 2004
Table 4.3 showed that 57.8% of the respondents are senior staff; 12.0% of them are the junior staff and 30.2% of them are the contract staff.
Ho: Pipelines are not reliable means of distributing and marketing petroleum products in Nigeria.
Hi: Pipelines are highly reliable means of distributing and marketing petroleum products in Nigeria.
This hypothesis is tested by analyzing the responses to questions 4 of the questionnaire as shown on table 4.4.
Table 4.4 observations made on the respondents as to whether or not pipelines are reliable means of distributing and marketing of petroleum products.
|a.||Facilitates marketing / distribution of petroleum products||40 (25)||2 (17)||42|
|b.||Do not facilitate marketing / distribution of petroleum products||10 (25)||31(16)||41|
COMPUTATION OF THE TEST STATISTIC
The test statistic is computed as follows:
X2 = å (O-E)2
Where X2 = chi-square
å = Summation
O = observed frequency
E = Expected frequency
The expected frequencies are as follows:
E11 = 42 x 50 = 25
E12 = 42 x 33 = 17
E21 = 41 x 50 = 25
E22 = 41 x 33 = 16
X2 = (40 – 25)2 + (2 – 17)2 + (10 – 25)2 + (31 – 16)2
25 17 25 16
= 9.00 + 13.24 + 9.00 + 14.06
X2 = 45.30
Degrees of freedom = (C–1) (r –1) = (2 – 1) (2-1) = 1 x 1 = 1
Level of significance: µ = 0.05
Critical value = X2.05; 1 = 3.841
Since the calculated value of chi-square (i.e 45.30) exceeds the critical value (i.e 3.841) we reject the null hypothesis and accept the alternative hypothesis.
Ho: Pipelines do not reduce the cost of transporting and marketing petroleum products in Nigeria.
Hi: Pipelines reduce the cost of transporting and marketing petroleum products in Nigeria.
This hypothesis is tested by analyzing the responses to questions 5-9 of the questionnaire as shown on table 4.5.
Table 4.5 Observations made on the respondents as to whether or not pipelines reduce the cost of transporting/marketing petroleum products
|a.||Reduces distribution and marketing costs||42 (24)||1(19)||43|
|b.||Do not reduce distribution and marketing cost||5(23)||35(17)||40|
COMPUTATION OF THE TEST STATISTICS
The expected frequencies are calculated thus:
E11 = 43 x 47 = 24
E12 = 40 x 36 = 19
E21 = 40 x 47 = 23
E22 = 40 x 36 = 17
X2 = (42 – 24)2 + (1– 19)2 + (5 – 23)2 + (35 – 17)2
24 19 23 17
= 13.50 + 17.05 + 14.09 + 19.06
i.e X2 = 63.70
Critical value = X.05; 1= 3.841
Since the calculated value of chi-square (i.e 63.70) exceeds the critical value (i.e 3.841) we reject the null hypothesis and accept the alternative hypothesis.
Ho: Pipelines vandalization do not impede the effective use of pipelines for distribution/marketing of petroleum products in Nigeria.
Hi: Pipelines vandalization impede the effective use of pipelines for distribution/marketing of petroleum products in Nigeria.
This hypothesis is tested by analyzing the responses to questions 10 – 11 of the questionnaire as shown on table 4.6.
Table 4.6 Observations made on the respondents as to whether or not pipeline vandalization impedes effective marketing/distribution of petroleum products.
|a.||Impedes effect marketing / distribution of petroleum products||35(23)||6(18)||41|
|b.||Facilities distribution/ marketing of petroleum products||12(24)||30(18)||42|
COMPUTATION OF TEST STATISTICS
The expected frequencies are calculated thus:
E11 = 41 x 47 = 23
E12 = 41 x 36 = 18
E21 = 42 x 47 = 24
E22 = 42 x 36 = 18
X2 = (35 – 23)2 + (6– 18)2 + (12 – 24)2 + (30 – 18)2
23 18 24 18
= 6.26 + 8.00 + 6.00 + 8.00
i.e X2 = 28.26
Critical value = X.05; 1= 3.841
Since the calculated value of chi-square (i.e 28.26) exceeds the critical value (i.e 3.841) we reject the null hypothesis and accept the alternative hypothesis.
Ho: The use of alarm system and police patrol will not reduce the incidence of pipeline vandalization in Nigeria.
Ho: The use of alarm system and police patrol will reduce the incidence of pipeline vandalization in Nigeria.
This hypothesis is tested by analyzing the responses to question 12 of the questionnaire as shown on table 4.7.
Table 4.7 Observations made on the respondents as to whether or not the use of alarm system and police patrol will reduce the incidence of pipeline vandalization in Nigeria
|Effects of the use of alarm system and police patrol||Response||Total|
|Reduces pipeline vandalization||48(32)||7(23)||55|
|Do not reduce pipeline vadalization||1(17)||27(11)||28|
E11 = 49 x 55 = 32
E12 = 55 x 34 = 23
E21 = 28 x 49 = 17
E22 = 28 x 34 = 11
X2 = (48 – 32)2 + (7– 23)2 + (1 – 17)2 + (27 – 11)2
32 23 17 11
= 8.00 + 11.13 + 15.06 + 23.27
i.e X2 = 57.46
Critical value = X2.05; 1= 3.841
Since the calculated value of chi-square (i.e 57.46) exceeds the critical value (i.e 3.841) we reject the null hypothesis and accept the alternative hypothesis.
4.2 SUMMARY OF RESULTS
The result of the study on the pipe line transportation and it’s significant to the marketing of petroleum products in Nigerian has revealed so many things that were hither to unknown to the researcher.
This shows many options and responses from respondents, whether pipe lines are reliable means of distributing and marketing of petroleum products. The researcher also went ahead to know whether or not pipeline vandalization impedes effective marketing or distribution or distribution of petroleum products and also whether or not the use of Alarm system and police patrol will reduce the incidence of pipeline vandalization in Nigeria.
DISCUSSION OF RESULTS, CONCLUSIONS AND RECOMMENDATION
This chapter dealt with the discussion of the major results of the research on pipeline transportation and its significance to the marketing of petroleum products in Nigeria. This chapter also contain the conclusions and recommendations of the study.
5.1 DISCUSSION OF RESULTS
The discussions and analyses done in this research led to the findings explained below.
The acceptance of alternative hypothesis one led to the inference that pipelines are highly reliable means of distributing and marketing petroleum products. This inference is validated by the fact that pipeline transportation is the most automated among the various mode of distributing petroleum products. Also pipelines affords the use of microwave communication devices as well as the electronic computer. It equally makes routing and scheduling of the arrival of products at terminals easy. In addition, since there are no traffic congestion, weather interference and interchanges, the petroleum products transported through pipelines arrives at destinations of the scheduled time.
The acceptance of alternative hypothesis two indicates that pipelines reduce the cost of transporting and marketing petroleum products in Nigeria. This is because once the pipelines and pumps are installed, the operating and maintenance costs are very low. Also the costs of operating pipeline systems to the environment are very minimal. Land space requirement is lower than that of road and railway. Noise pollution and environmental degradation is also low.
The acceptance of alternative hypothesis three revealed that pipeline vandalization impede the effect use of pipelines for the distribution and marketing of petroleum products in Nigeria. This inference is valid when viewed in the light of the acute fuel shortages caused by deliberate damages to the pipelines used to convey refined products to various distribution centres.
The acceptance of alternative hypothesis four showed that the use of alarm systems and constant police patrol will reduce the incidence of pipeline vandalization in Nigeria.
Based on the above findings, the researcher made the following conclusions;
- The use of pipelines facilitates effective distribution and marketing of petroleum products in Nigeria. Such products include; premium motor spirits (PMS) or petrol, automotive gas oil (AGO) or diesel, household kerosene (HHK) and aviation turbine kerosene (HHK).
- Pipelines reduce the cost of transporting and marketing petroleum products in Nigeria.
- Pipeline vandalization impedes the effective use of pipelines for the distribution and marketing of petroleum products in Nigeria.
- The use of alarm systems and police patrol will reduce the incidence of pipeline vandalization in Nigeria.
The researcher recommended the following:
- The federal government should construct more pipelines to link all the states of the federation and various distribution centres of NNPC.
- The NNPC should install effective alarm systems on all the pipelines in the country. They should also liaise with the Nigerian Police Force so as to effectively constitute a police patrol team that would regularly monitor the pipeline network in the country. These strategies would help to curb the problem of pipeline vandalization in the country.
- As a precautionary measure for preventing deliberate damage to pipeline, the NNPC authorities, should wherever possible, bury petroleum product pipelines many meters under the ground.
5.4 SUGGESTIONS FOR FURTHER STUDIES
The need for further studies in pipeline transport is not closed by this pioneer work hence the researcher suggests that further work should be carried out on special areas as pipeline vandalization, pipeline maintenance, as well as the relevance of water transport to the marketing of petroleum products.
5.5 LIMITATIONS OF THE STUDY
Some limitations imposed constraints on this study, ranging from data collection to data analysis and resting. One is that the time given for this study was not adequate for a research of this nature. There was also a scarcity of research materials hence the researcher was forced to limit himself to the available time as well as further delaying the progress of the study.
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Department of Marketing
Institute of Management and Technology
30th July, 2004
I am a final year student of the above department and institution. I am conducting a research on the significance of pipeline transportation to the marketing of petroleum products in Nigeria. This research is purely for academic purposes and hence your honest answers to the questions contained in this questionnaire will be greatly appreciated.
Thanks for your anticipated co-operation
Instruction: Tick ‘X’s where it seemed appropriate in the following questions
SECTION A – PERSONAL DATA
(a) Male [ ]
(b) Female [ ]
(a) 20 – 30 years [ ]
(b) 31- 40 years [ ]
(c) Above 40 years [ ]
3. Occupational Status
(a) Senior staff e.g Directors, Managers (marketing) etc. [ ]
(b) Junior staff e,g maintenance technicians etc [ ]
(c) Others e.g contract staff [ ]
SECTION B – GENERAL QUESTION
4, Do you consider pipelines reliable for the marketing of petroleum products?
(a) Yes [ ]
(b) No [ ]
What is your opinion of pipelines as to its suitability in the marketing of petroleum products in the following area.
Satisfactory not satisfactory
5. Convenience [ ] [ ]
6. Economy [ ] [ ]
7. Low environmental costs [ ] [ ]
8. Safety [ ] [ ]
9. Do you believe that pipelines reduce the cost of transporting petroleum products in the country?
(a) Yes [ ]
(b) No [ ]
10. Are there any constraints to be effective use of pipelines in the distribution and marketing of petroleum products?
(a) Yes [ ]
(b) No [ ]
11. If yes, what are these constraints?
(a) Pipeline vandalization [ ]
(b) Accidental damages to pipelines [ ]
(c) Others (please specify) [ ]
12. Do you believe that the use of alarm systems and constant police patrol will reduce the occurrence of pipeline vandalization in Nigeria?
(a) Yes [ ] (b) No [ ]