1.1 BACKGROUND OF THE STUDY
Oil exploration began in Nigeria in 1908 although the documentation of occurrence of the minerals were reported some five (5) years earlier in 1903. The exploration efforts were punctuated by two world wars but eventually yielded results with discovery of oil in Oloibiri in 1956 by sheel Bp. Bayeri (1996:7)
Production increased from a more five thousand (5,000) barrels per day in 1957 to seventeen thousands ( 17,000) per day by independence in 1960 and leapfrogged to four hundred and fifty thousand (450,000) barrels a per day by 1966. Although, this upgrade trend was slowed down by the civil war, by 1970 daily production had reduced the level of one million barrels per day. A peak production level of two million four hundred thousand (2.4 million) barrel per day was achieved during the second quarter of 1979.
However, before 1990 production fell to one million. Six hundred and eleven million (1.611 million) per day both on technical grounds and adherence to OPEC, quota brought about by the need to control production, to support price in a globally avert supplied to the market. As at (1999) OPEC quota for Nigeria stands at 1.865 million per day as set in 1990
The first marketing of oil from Nigeria occurred in 1958. DETEGE (1996:9). As most multinational oil comprise operating in the country has 100% equity in their operations up till 1973, there was no active government on Nigeria oil until then.
Prior to 1973, all Nigeria oil was marketed by oil producing comprise through integrated system using their transfer price. Government’s interest in the oil industry was handled by a number of government departments including the hydro carbon section in 1963 and department of petroleum in the ministry of mines and power in 1970. Although the Nigeria national petroleum corporation (NNPC) was formed in 1971 and was primarily to market Nigeria oil, government direct involvement in the marketing of oil did not begin until 1973. That was when the government started having it’s own equity interest in the operation of the oil companies ( Bayero 1996:10)
It has been the policy of government to put in place proper facilities in the down stream sector like refinery, distribution and marketing of petroleum products so as to embrace the value added to our petroleum resources. Presently, Nigeria has four refineries with two at Port Harcourt while Warri and Kaduna has one each. All the refineries has the total production capacity of four hundred and forty five thousand (445,000) barrels per. To ensure the supply of available petroleum products through out Nigeria, the Nigerian National Petroleum Corporation ( NNPC) built about three hundred kilometers (300,000km) net work of pipeline covering all parts of the county, inter –connected to seventeen (17) petroleum product depot in Nigeria. This was aimed at eliminating the perennial storage’s of petroleum products in the country. Etefe (1997:8)
To aethalize this noble objective in Enugu, constitution of n oil depot began at Emene, and was completed and commissioned by the military administrator on 24th August, 1979. Enugu depot which was commissioned in 1979 has the storage capacity of about twelve million mi – cube (12,000,00m/3) at present. It has a stock only three bye products of petroleum products namely, premium motor spirit (PMS), otherwise called petrol, dual purpose kerosene (DPK) and Automobile Gas oil (AGO) or Diesel for onward distribution to her customers in the oil marketing companies.
The depot went to serve the states which are under it, which include the present Enugu, Anambra, Kogi, Ebonyi, and parts of Imo, Benue and Cross – River state.
Enugu depot sighted at Enugu East Local Government of Enugu state is at depot as well as a pumping station. As products and distributes same to the general public through oil marketing companies. But as a company station, it was meant to supply other depots in the Northern states which include Makurdi, Yola, Minna and Suleja directly from Port – Harcourt refinery through pipeline product distribution system.
It is the wish of the federal government to ensure steady and regular supply of petroleum products to this end, effort has been made to expand and inter connect all existing refineries. It will ensure that strategic stock of petroleum produce is well maintained in the country by allowing quick replenishment of stock in all product depot of which Enugu depot benefited. So therefore, my interest to study the problems of petroleum products distribution, allocation and marketing in Enugu.
1.2 STATEMENT OF PROBLEMS:
The poor allocation and distribution of petroleum product to the public.
The effect of diversion of petroleum products to the consumer.
The resultant effect of short in supply of petroleum product at Enugu depot to the public.
Shortage of meter tocket/other materials bring a problem in distribution of petroleum products.
OBJECTIVE OF STUDY
To create on awareness for harmony between the depot management and her workers to ensure an efficient and effective working conditions as well as high productivity.
To stress the need for marketers to sell pure and unadulterated petroleum products to the motorist at their various filling stations.
To advice government on the appropriate pricing of petroleum products as well as profit margin allowed to marketers.
To educate management on the need for proper checking procedures by their workers.
To advice government on the need for maintenance of her refinery as the main source of product of various oil depots to ensure steady supply of petroleum products.
To highlight on the need to have a steady or constant product supply from the refinery
To highlight on the need for marketers to have sound trucks and vehicles for easier evaluation and procurement of petroleum product.
What are the allocation patterns adopted by the depot management?
To what extent has lack of management skill and personnel lapses hinder the efficient allocation and distribution system at Enugu depot?
To what extent has the insufficiency petroleum at the depot affect the distribution system?
How far has the inability to maintain and service, procured equipment pose a threat to the industry?
At what extent has poor condition of our roads network affect the efficient and effective distribution of petroleum product in Enugu zone.
What is the impact of adulteration of petroleum products to the oil industry?
SCOPE OF STUDY
The researcher is concerned with the problems of allocation, distribution and marketing of petroleum product with particular reference to the Nigerian National Petroleum Corporation (NNPC) Enugu Depot Enugu East Local Government in Enugu State.
SIGNIFICANCE OF THE STUDY
The significant of this research is that the result will help identify the most effective and efficient way of managing an oil depot. It will provide a clear cut operational guide to the depot management and marketers alike as a model for petroleum product allocation, distribution and marketing which is their primary responsibility to ensure evenly and far allocation and distribution of petroleum products.
On this note, awareness is being created on how steady supplying of the products namely;
Prim motor spirit (PMS), otherwise knows as fuel
Auto Gas oil (AGO) –Diesel oil
Dual purpose kerosene (DPK) – kerosene should be making available at Enugu depot at all times for onward allocation to the marketing companies and subsequently distributed to their various filing station.
In view of this, Federal government and her agencies larger with the petroleum larger with the petroleum products allocation and distribution like NNPC marketers as well as task force and others will utilize the research for economic and co-operative analysis for the benefit of both government, oil marketing companies and the NNPC and the larger society.
Again, the consumer needs and services will be provided at this time when petroleum products scarcity is the order of the day.
Finally, the oil marketing companies will be able to understand their role in the distribution and marketing of petroleum products Ex – Enugu Depot. They will as well appreciate the need for them to avid product diversion and adulteration and will work to improve on the infrastructural facilities at their stations for the general well being of the people.
REVIEW OF RELATED LITERATURE
The chapter reviewer literatures relating to the topic under the following headings:
2.1 History of petroleum in Nigeria
2.2 Historical background of NNPC Enugu Depot
2.3 Allocation/programming and approval
Petroleum products Ex-depot price
Loading and process for calling in trucks
Mode of distribution
Participants in oil industry
Summary of related literature
2.1 HISTROY OF PETROLEUM IN NIGERIA
Nigeria for one is a beneficiary of natures larish generosity. We have oil the ever flowing black gold. This natural bounty, like sea “ never dry as far as it is maintained and promptly tapped. The country’s first barrel of crude oil made its uncertain entry into the world market. It was largely an event unnoticed, but with it, Nigeria put a knife to reap that bound to the stake of the dollars “Okpai (1988:1)
The petroleum dollar brought from oil came quickly on the level of oil prospecting venture which made its depot in Nigeria in 1956, shortly after the ever flowing black gold was discovered. For the refinement of the oil, the Nigerian petroleum refinery company was gingerly established in 1965 and with pilot agency – the Nigerian National Petroleum Corporation (NNPC) and it’s auxiliary units founded in Port Harcourt, Kaduna and Warri.
Shell BP a foreign conglometric blazed the trial among the oil companies in having share in our crude. It has 50% share while Nigeria has 50% other companies like Chevion, Agip, Elf, African Petroleum, Texaco, Total, Unipetrol, Mobil and even individual companies followed suit, albeit on lesser percentages. Many barrels of oil are mined and sold per day getting millions of dollars for country on daily basis. Everyone knows that the nation made huge investment in trying to make petroleum products available everywhere in Nigeria easily and at all time.
Quite ironically, the country suffered a recurring decimal of yearly fuel scarcity. Currently they are also scarcity of petrol diesel, and kerosene as their prices have risen to high heavens. For a nation widely acclaimed as Africa’s second largest in terms of oil quota assigned by the organization of petroleum Exporting Countries (OPEC) should not experience the trauma of fuel scarcity. However, due to the existence of certain bottlenecks, the nation has not realized her full benefit of investment in oil sectors.
The occasional and now almost regular disruption of petroleum products supply in the country is well known by all. It should be emphasized that the problems that have prevailed the fuel realization of hitch free product distribution in are not really insurmountable. The problems revolved round the leaping nature of the growth of demand for petroleum products in Nigeria was accentuated by smuggling and diversion of the commodity. Bayer O .D. (1996:7)
2.2 HISTORICAL BACKGROUND OF
NNPC/PPMC oil depot Enugu is located at Emene in Enugu East Local Government of Enugu state. Commissioned on 25th August, 1979 by the military Administration of the then Anambra state Col. D.S. Abubakar.
It has a total capacity of 12 million litters of petroleum products. It has only three by products in stock which include premium motor spirit (PMS) otherwise called petrol, Dual purpose kerosene (DPK) and Automobile Gas Oil (AGO) or diesel for onward distribution to her customers – the oil marketing companies.
Enugu depot has a total number of six department namely: Admin, Sales, Security, Accounts, Operations and Safety departments with a total workforce of 250 workers. Each department is managed by the head of such department who equally reports to the depot manager who is the overall boss.
2.3 ALLOCATION/PROGRAMMING AND APPROVAL
ENUGU depot has a total of 345 marketing both major and independent marketers ENUGU marketers gives her attraction by PPMC Head Office at Lagos.
Each marketer has a minimum of 150,000 Litters of petroleum (PMS), 72,640 Liters each of kerosine and diesel per outlet per month’s .Therefore, the projected depot allocation per day are as follows;
A Petrol – 6million Liter par day’
B Diesel – 2million Liters per day
C kerosene – 2million Liters per day
Based on the projected depot locating capacity, the management prepared a daily weekly product allocation for all the marketers using PPMC management allocation. Under normal condition, allocation should be based strictly on daily/weekly programme when stocks are inadequate depot manager shall chair co-ordination committee ensuring that the allocation is propagated accordingly by other members of the committee which shall comprise depot sale supervisor, major marketers and independent marketers co-coordinators and stock assistance. Sale supervisor shall process and approve ticket allocated by co-ordination committee, ”Etete.D.L (1997.17)
There are two set of customers to NNPC as stated by mrs Alege (1996:8)credit and cash and carry marketers. While all the eight major and few independent marketers that meet stipulated Criteria enjoy credit facilities, most independent marketers are in cash and carry basis. Those enjoying credit facilities simply secure their meter ticket for loading when they have completed the necessary forms which must be approved by the depot manger and depot accountant. Their ticket wil be ready for Loading when it is finally approved by the sales supervisor. After loading, accounts department will bill them for the quantity of product loaded with a particular ticket. Payment is usually on bank draft which must be within one month from the date of loading.
But for the cash and carry marketers, payment for their products are through the sales department with bank draft. The sale department will raise for such marketers a form called DO7 in which the type, quantity and corresponding amount of product which such company is paying for. Then meter ticket to the account department for onward payment to central Bank. After clearing from the bank, such marketers will be allowed to leave her location with such meter ticket for products allocated to them. “Alege G.O (1996:8)
2.5 PETROLEUM PRODUCTS EX-DEPOT PRICE
According to imouktuede (1996:17) that when the marketing of petroleum product is the sole responsibilities of the major marketing companies, the price structure recognized transportation cost and other distribution overhead from the supply points Hence the prices of petroleum products varies from place to place.
However, with the urge to take over the total control of thr industry, the federal government introduced uniform pricing of the conventional products through the establishment of the Petroleum Equalization fund (PEF) in October 1973. This was the beginning of the regulated products pricing which is still in force by the government. Hence, it is unethical to retail petroleum products above approved and regulated prices
To ensure the effective management of uniform pricing the federal government allows the purchasing of petroleum produce to marketers as follows;
A Premium motor spirit (PMS) N 43,50K
B Dual purpose kerosine (Dpk) N43.50k
C Automobile AS OIL (ago) N53.50K.
All per Liters. While government allowed the oil companies to sell this product to the general public as follows:
A Premium motor spirit (PMS)
B Dual purpose kerosine (DPK)
C Automobile Gas Oil (AGO)
Per liter within the domestic market, pump prices is being exploited by the adulteration of gasoline.Although, quality fuel are lifted from our depots nation wide, but under, they got contaminated by profiteers before reaching the outlets.
Consequently, the objective of providing cheap kerosine at reduced price is defeated, and contributing to kerosine scarcity in most homes.(PPMC Sales manual october; 1994:4)
2.6 LOADING AND PROCESS FOR CALLING TRUCKS
Based on daily programs, oil marketers submit their meter ticket for the day’s loading. The depot sales supervisor will approve the meter ticket and send to the computer supervisor. The computer supervisor will then process the ticket and send to the trunk entry gate. Calling in truncks shall be strictly based on the lifting ist for the days and in order of arrival. Any maret that misses its turn due to late arrival shall lose it and revert to bottom of the lost 9PPMC sales manuel october; 1994;8).
MODE OF DISTRIBUTION.
The mode of petroleum products distribution ex-Enugu depot is of two ways:
Pipeline: This is a specialized means of shipping liquid products such as petroleum products which are sent to their destination through pipes. Enugu depot gets her supply from Port Harcourt refinery through this pipeline system. This system is a multi products pipelines. The products are pumped in batches from refinery to Enugu depot Edoga (1994:7)
By Road: Product movement by road is dominant, since this is the only mode of transportation to all the retail outlets dotted all cross the states under Enugu depot, the truck size ranges from 6mt to 4mt Oboli (1994:94).
SALES/ MARKETING OPERATIONS:
Petroleum products are sold in bulk to eight major marketing companies and about 345 independent marketing companies. The procedure is that PPMC signs a bulk sales contract with a limited liability petroleum company licensed by Directorate of petroleum products. The company must own a standard retail outlet and must be capable of marketing at least 3 products namely; petrol, kerosene and gas oil. A standard retail outlet must meet some marketing storage and safety requirements such as large storage tanks, at least two pumps to dispense petrol, a pump each to dispense kerosene and gas oil toilet facilities, fire extinguishers, pails of sand etc. In the sales contract signed, specific qualities of monthly or yearly sales volume will be stated and the depot of loading identified.
The pipe and product marketing company (PPMC) advises such a company to own its trucks so as to ensure prompt loading of products. “Igiebor .N. (1997:10)
There are two set of customers, credit and cash and carry marketers. Wist all the 8 major and few independent marketers that meet stipulated criteria marketers are on cash and carry basis. Marketing companies sell through appointed dealers t their outlet while petrol station attendant may or may nor be employed by marketing companies. This depends on the policy of each marketing company.
On daily basis upon the receipt of a marketer’s request and the conformation that the product is like available and that customer certifies to load, the marketers representatives with his appointed transportation a truck for loading. A meter ticket is prepared stating the name of the marketers the location, the product type (5), the date, the location of the outlet, and the registered number of the truck the quality loaded etc. The metre ticket are prepared in 7 seven copies and distributed as follows: Gate pass for security agents, drivers’s waybill computer copy marketers copy accounts copy and file copy. The marketers now prepares a waybill assigning the truck to a station. Once a truck leaves the NNPC premises dully stamped by security forces, the responsibility lies on the marketers/transport to get the lies on the marketers/transport to get the quality of products loaded to the designated outlet. At the depot, there is a schedule of loading which a marketer’s representative must sign as prof of receiving product per day, Aleg (1996:9).
PARTICIPANT IN THE OIL INDUSTRY
To better appreciate the impact of the ethics in the realization of steady and uninterrupted supplies of petroleum products, it is necessary to evaluate the roles and responsibilities of different participants in the allocation, distribution and marketing of petroleum products. This is to bring the standard and practices in the industry to focus and correct perspective.
THE NIGERIA NATIONAL PETROLEUM CORPORATION (NNPC)
It is the responsibilities of NNPC to build and manager the nations refineries process crude oil into finished petroleum products.
PIPELINES AND PRODUCTS MARKETING COMPANY PPMC.
This is a subsidiary of NNPC, charges with the responsibility of acquiring crude oil for processing at refineries, distributing and selling the petroleum products at its depot to the licensed major independent marketing companies.
They buy and sell petroleum products at their retail outlets to the consumers. There are currently (8) eight major marketers engaged in the retailing of petroleum product at their out let or full station . major marketer are those that own over 100 outlet each while independent marketers own less than 100 outlets each.
For the movement petroleum products from NNPC/PPMC depots to outlets, the marketers employ the service of transporters. They are all independent of NNPC/PPMC supervision.
DEPARTMENT OF PETROLEUM RESOURCE (DPR)
This is the arm of the government under the ministry of petroleum resource responsible for the licensing and regulating, the activities of company’s which process, store, distribute and soft petroleum product. “Imovillaedu O.S. (1996:14)
SUMMARY OF RELATED LITERATURE
Petroleum products allocation, distribution and marketing in Nigeria is facing a number of problems actually caused by the operators of the system themselves.
The problems range from inadequate maintenance procedure of the nation’s refineries, oil depots and other facilities that are actually needed for easy products distribution.
Also poor condition of our roads network posed serious problems to the distribution channel of petroleum products as well as it’s marketing especially at Enugu Depot.
Meanwhile, to ensure the effective and efficient and marketing petroleum product allocation/distribution and marketing the government employed the services of other participants in that distribution channel. Those participant include the Department of Petroleum Resource (DPR), the oil weight companies and the department of weight and measures. All these agencies with the responsibility of ensuring steady supply of petroleum products nation wide Oboli (1973:10)
3.1 RESEARCH DESIGN
In an attempt to ascertain the problems of allocation, distribution and marketing of petroleum product with a view to suggestion, the appropriate method of managing it, the researcher adopted descriptive approach. This design is chosen due to the fact that the research dealt on description of existing management techniques and the problems surrounding such improper procedures and the proper measures to be taken.
AREA FOR THE STUDY
This section gives us direction on how to identify the NNPC/PPMC depot Enugu as the place being researched it is situated at the junction where old and new Abakaliki road joined.
It is directly opposite Eke Obinagu market square. It is geographically bounded in the North by Onuogba Nike, south by Obinagu village, East by Nchatancha Nike and west by Emene town center. Consequently the depot is located in Emene, Enugu East local government area of Enugu state. This area is about 20 kilometres away from Enugu Airport Authority and other industrial sites in Emene – Enugu.
POPULATION FOR THE STUDY
The population of study comprises all the NNPC/PPMC staff and the marketers operation at Enugu depot. Number of individual.
SAMPLE AND SAMPLING TECHNIQUES
A simple random technique was used with this formula.
N = N
1 + N (e)2
Where N = Population 100
E = sampling error (5%)
N = sample size 80
By substitution = 100
1 + 100 (0.05)2 = 80
INSTRUMENT FOR DATA COLLECTION
The instrument for data collection is questionnaire and interview schedule:
VALIDITY AND RELIABILITY OF INSTRUMENT:
In testing the accuracy of the instrument for this data collection, the pilot test technique was employed to establish validity. And in carrying out reliability test I also adopted test – retest to the group of sample on two occasions and results compared.
METHOD OF DATA COLLECTION
The researcher used questionnaire in gathering data. The number of questionnaires administered to respondent were 100. The method of administration of the questionnaire is by face to face distribution. Some of the questionnaire were collected on the spot while others were collected in a later appointed date.
METHOD OF DATA ANALYSIS
The data generated were analyzed using and pie chart and percentage.
DATA PRESENTATION AND ANALYSIS
This chapter is designed for presentation and analysis of data collected from the respondents through research question. And to outline the results, a total of sixty questions are designed for this purpose.
The response got was 80 completed questionnaires. The respondent is 80% of the total distributed. This is enough representatives for a meaningful generalization on conclusion.
Research Question One:
What is the allocation patterns adopted of the management?
Representing this on a Pie chart.
Looking at the table and chart above, it tells us that allocation pattern adopted by management effectively is the strategically pattern. And if you watch the table you will find out that strategical respondent is 64.%. This is because of insufficient petroleum products in NNPC Enugu Depot, so they show this product strategically.
Research Question Two:
To what extent has lack of management skill and personnel lapses hinder the efficient allocation and distribution system at Enugu depot.
Representing this on a chart
It can be clearly noticed that in the table and pie chart above that 75% said that lack of management skill do not hinder distribution because they have enough trained personnel that the problem is insufficiency of the products, while 25% respondents said yes that it hinders said so because some marketers engage in adulteration of the products.
Research Question Three:
To what extent has the insufficiency of petroleum products at the depot affect distribution system?
Representing this pie chart.
It can be clearly noticed from the table and pie chart that insufficiency of petroleum product at Enugu depot is a big problem which the 75% respondents said and the 25% respondents said that it is not a big problem. The 75% that said yes, said that about ten months ago that there was been insufficient petroleum products in the depot and it has been a big problem both marketers and the citizens. While the 25% who said no that it not a big problem said that the main problem is that marketers divert the products to other place that it was not assigned to.
Research Question Four:
How far has the inability to maintain and service procured equipment’s pose a threat to the industry
Representing this on a pie chart
This indicated that those who say that poor maintenance of depot facilities by management is a big problem were 69% while those who said No is 31%. From the data collected, I was informed that some loading arms spoiled some years ago and are not yet repaired or replaced uptill now. And the respondent said that one loading arm for prim motor spirit (P.S.M) and at times all the arms will be faulty and management will not border to put them in other.
Some people still no that poor maintenance of depot facilities by management does not cause any problem.
Research Question Five:
From the above representation, 40% of respondent said that poor condition of roads cause a big problem in the distribution of the products. Marketers in the rural areas where erosion and hills are finds it difficult and it becomes hard to get or see petroleum product in the rural areas.
But 60% of the respondents said “No” that it doesn’t cause a big problem in the distribution of the products. These are mainly those in urban areas.
Research Question Six:
What is the impact of adulteration of petroleum products to the oil industry?
Representing this on a pie chart
Looking at the table and pie chart above, it tells us that the adulteration of the products do not affect its price and distribution by the 64% of the respondents. This is because prices are fixed and adulteration is done in the dept.36% of the respondents said that it affects the price and distribution because of the attitude of greatly unauthorized marketers who engage in black market.
SUMMARY OF RESULTS
Below on the six key questions,
What are the allocation patterns adopted by the depot management?
To what extent has lack of management skill and personnel lapse hinder the efficient allocation and distribution system at Enugu depot?
To what extent has the insufficiency of petroleum at the depot affect the distribution system.
How far has the inability to maintain and service procured equipment pose a threat to the inventory?
At what extent has poor condition of our roads network affect the efficient and effective distribution?
What is the impact of adulteration of petroleum products to the oil industry?
The response obtained from the questions above, shows that 64% agree that products are standard strategically while 34% said equitably and 25% of the respondents said poor management skill and personnel lapses products while 75% said it doesn’t.
Also 75% agreed that insufficiency of the petroleum product affects the distribution system while 25% disagreed on that. 69% said that inability to maintain and service procured equipment pose a falconet the industry, while 31% said that it doesn’t. And again, 40% of the respondents who are from the rural areas said that poor road net work negatively affects the effective distribution while 60% in the urban area said it’s no problem at all.
Finally, 36% of the respondents agreed that the adulteration of the products affects the price and distribution of the products because of greedy marketers while 64% said is does not affect price and distribution because adulteration does not take place in the depot. urban area said its no problem at all.
Finally, 36% of the respondents agreed that the adulteration of the products affects the price and distribution of the products because of greedy marketers while 64% said is does not affect price and distribution because adulteration does not take place in the depot.
DISCUSSION, CONCLUSION AND RECOMMENDATION
5.1 DISCUSSION OF FINDINGS
Responses from the staff of Nigerian National Petroleum Corporation (NNPC) pipelines and products marketing company (PPMC) and marketers of petroleum products shows that the major reasons for poor allocation and distribution of petroleum products at NNPC/PPMC Enugu depot are as follows:
Insufficient petroleum products at the depot
Poor allocation formula for sharing petroleum products.
Low profit margin to the marketers
Poor road network for distributing the products.
The response obtained from the market shows that 60% agree that petroleum product is shared strategically, 40% said “No”
On the request for kickback by NNPC/PPMC officials to the marketers before giving allocation 52.5% said yes while 47.5% said No.
On the managerial skill 75% said it hinders the efficient allocation and distribution system while only 25% said it does not. Also, on the personnel lapses 33.75% agreed that it affects distribution while 45% said it not affect it but 21.55% said that it affect it partially.
Insufficient petroleum product of the depot for distribution, 33.7% agree, 8.75% disagree that insufficient petroleum product affect the marketing.
On allocation formula 75% said yes while 25 said No that insufficient of petroleum products does not affect the allocation formula.
Probing further into what the think are responsible for the products adulteration, the respondents give what they think as
To make more profit
To cover some of the overhead cost
When an inquiry was made on effect small profit margin on sell of petroleum products, 90% said yes it is a problem.
Many of the marketers hire trucks for lifting their products, and this loads increase pump price on this 75% said yes while only 25% said no that it does not affect pump price.
Also the high cost of freight 55.5% said it is a problem to the effective marketing of products while 42.5% said it is not a problem. Also when asked whether management repair loading pumps, 93.75% is not satisfied with the management while only 6.25% said that the pumps are Okey.
To find out if the bureaucracy delay the repair and performance of equipment 75% said yes. A does while 25% and it does not.
When asked to say the reason why it still have scarcity of petroleum products in spite of government effort to put to an end this problem, some of the respondents gave their reasons as follows;
Insufficient of the products
Poor road net works to outlets
Poor working conditions for oil workers
The activities of task force on petroleum products
And to find out to what extent poor road network affect distribution, 61.25% said that it does not affect distribution while 38.75% said that it affects distribution and equally cause accident to petroleum tankers. Finding out is tanker driver adulterate petroleum products on their way to their destination, 90% disagree while only 10% agree with the question. Further inquiry was made to find out if marketers indulge in product adulteration 57.5% said yes while 42.5% said No. this is aimed at covering their expenses.
On whether taits abate diversion of petroleum product 90% of the respondent said yes while only 10% disagree. The result and effect of this action is the steady scarcity of petroleum products at that on.
Meanwhile 75% of the respondents agree that security agents receive bribe from an auscupoius marketer to divert the product.
This bills government intention to ensuring availability of petroleum products. It is also found that 52.5% said that oil worker Siphon and adulterate petroleum products, as a result of poor working condition of oil workers.
And to find out the activities of task force on petroleum products, it was found out that 76.5% of respondents said that they receive money from marketers and motorists. This is counter productive to the government good intention.
Now the researcher can confidently say based on the result got that the problems of allocation, distribution and marketing of petroleum products a case study of NNPC/PPMC Enugu Depot are:
Insufficiency of petroleum product at the depot.
Corrupt practices, by the NNPC/PPMC staff and marketers
Low profit margin allowed to oil marketers by the government.
Poor condition of oil workers.
Other problems are; Poor condition of our road, non availability of quality spare parts etc.
The result of the questionnaire showed that the menace caused by the touts is a big problem said by the 70% of the respondents.
Furthermore, it is true that the federal government sets up various monitoring groups, the DPP monitoring groups, etc, the impact of these groups were felt in the distribution and marketing of petroleum products.
Almost thirty other reasons were mentioned by the respondents as being the problems of allocation distribution and marketing of petroleum products. Amongst these reasons are; high cot of petroleum products, lack of encouragement from the government like credit facilities poor salary to trucker drivers and lots of others.
Having successfully identifies some of the major problems facing the allocation, distribution and marketing of petroleum products in Enugu depot, the researcher feels obliged to make the following recommendations;
Management of NNPC/PPMC should ensure that product allocation to the marketers will be based on normal allocation formula. This is to ensure equitable distribution of petroleum.
The management of NNPC/PPMC Enugu depot as a matter of urgency should dismiss officers found to be wanting in the discharge of their duty.
Government should allow more profit margin to the petroleum marketers to help them cover their over head most.
Rehabilitation of our roads is very important. This will be of a good help to the distribution and marketing of petroleum products to every part of the state.
Most importantly, the government should ensure that there is availability and enough of petroleum products of the depot. This can be achieved by ensuring that our refineries maintained so as to keep on with production.
The government should recognize the various taskforce charge with the monitoring, the distribution and marketing of petroleum products, to ensure that objective of government is achieved.
The security agents operating at the depot should see it as a duty to plush out touts to create a healthy atmosphere for marketers to operate.
Furthermore, poor working condition of workers greatly affect their moral for exhibiting their unique talents towards achieving the objectives of the industry. Workers in oil industry should enjoy all the benefits due to them like house loan, over time pay, insurance indemnity, health and transport allowances, huge salary scales and prompt payments.
These, if adequately provided will induce workers to perform effectively and efficiently. This will in a long way check source fraudulent and mal practices normally perpetuated by workers due to insufficient reward from the industry
SUGGESTION FOR FURTHER STUDY
Having successfully researched on the problems of allocation, distribution and marketing of petroleum products in NNPC/PPMC Enugu depot, I suggest that further study on this topic should be on.
Effect of Diversion of Petroleum Product to the Economic Activities of Enugu state”.
The Impact of Adulteration of Petroleum Products to the Users.
LIMITATION OF THE STUDY
The researcher work should have been successful if I had enough resources. As a student, I faced a lot of financial problems which hindered my mobility and hence could not make enough findings.
I also encountered the problem of “No” response to some of the research questionnaire. There non-challant attitudes led to the unreliable results and in some cases they are ignorant of the question asked.
However, my greatest enemy was time. I was engaged with my normal official work so often and this consumed most of my times that to achieve mush by the day became almost an uphill task.
Another problem was that I lack relevant text books and periodicals. My poor understanding of terms/met in the course of the project added to the situation but I tried as much as possible to resolve it. Despite all these problems, this work would have taken a different and better presentation.
Alege G.O (1996) Petroleum products marketing in Nigeria – Lagos NNPC Journals
Alake Dele (Tuesday, 19th March (1998) fuel scarcity the shame of a nation, Lagos: National concord
Bayero .D. (1996) Business studies for schools and college – Enugu: Jamoe Enterprise (Nig.)
Edoga .P.N. (1994) History of crude oil marketing in Nigeria – Lagos NNPC Journals
Etete D.L (1997) Investment prospect in the petroleum sector of Nigeria Lagos: NNPC Journals
Ekpu Ray (1998) Politics of soil subsidy in Nigeria – Lagos: Newswatch magazine.
Imouwlaedu .O.S (1996) Business and ethics of petroleum product marketing in Nigeria Lagos: NNPC Journals
Igiebor Nosa (1997) The shame of a nation Lagos: Tell magazine.
Oboli H.O.N (1973) A new outline geography of west Africa Lagos: University press.
13th June, 2005.
I am a National Diploma student in Business Administration and management of staff Development and Distance Education Institute of Management and Technology Enugu.
I am conducting an academic research project on the problems of allocation, distribution and marketing of petroleum product. A case study of NNPC/PPMC Enugu depot at Enugu East Local Government Area.
Information received is purely for academic purposes and will be treated confidently.
You are there, requested to please co -operate
Uke Rosemary .C.
Please supply details or tick as appropriate for each question below
What are the allocation patterns adopted by the management?
Does the pattern adopted negatively affect the price of the products?
Does lack of management skill hinder efficient distribution of petroleum product in Enugu Depot?
Does personnel lapse hinder the efficient distribution of petroleum products?
Does poor road net-work affect the price and distribution of petroleum products
Does adulteration of petroleum products causes damages to the oil industry?
Do high cost of transportation by tanker owners causes problems of high price?
Does insufficiency of petroleum products at Enugu depot causes a big problem?