Almost every home and business is powered by generator fired by
subsidized petrol. It is very obvious that subsidy removal will worsen the
country’s situation and worsen inflation. It is in the light of the above
removal on the effective marketing of petrol in Nigeria using Enugu as the case
study. In the course of carrying this research, the research used primary and
secondary data, the primary data deals with personal observations, interview
etc while secondary data contained the use of textbook, internet, journals,
magazines, etc. The population comprises marketer, consumers and
distributor of petrol products. Which is made of 150 respondents.
The sample size was determined using Taro Yaamni’s formular in which the
hypothesis was tested using chi-square. It was concluded and recommended
that fuel subsidy affect marketers and therefore private investors and
entrepreneurs should be allowed full participation in the sector be allowed
full participation in the sector, a situation that will lead to effectiveness
in the distribution of the product.
1.1 Background of the
1.2 Statement of the
1.3 Objectives of the
1.4 Research Questions
1.6 Significance of the
1.7 Scope of the study
1.8 Limitations of the
1.9 Definition of the Terms
2.1 Theory of Fuel Subsidy
2.2 Meaning of Subsidy
2.3 History of Fuel Subsidy Remove in Nigeria
2.4 The Roles or functions of Fuel Subsidy
2.5 Problems Association with of Fuel Subsidy Removal
2.6 Disclose Indent Among NNPC and Oil Marketers
2.7 Problems of Fuel Subsidy Removal Oil
3.2 Are of the
3.3 Sources of
3.4 Population of the
3.5 Sample Size
3.6 Method of Data
3.7 Reliability of the Instrument
3.8 Validity of the Instrument
DATA PRESENTATION AND
4.2 Test of Hypothesis
DISCUSSION OF RESULTS, CONCLUSIONS ANDRECOMMENDATIONS
5.1 Summary of
1.1 BACKGROUND OF THE
The issue of subsidizing and subsidy removal has been on the
public domain since the transition from military rule to civilian rule in 1999.
But the one that seems to have generated a lot of controversy is the issue of
subsidy removal. And one major sector that has always affected is the oil or
fuel subsidy. Two reasons can be adduced for this. One is the fact that oil
remains the backbone of the Nigerian economy. And secondly, large chunk of
government money go into oil subsidizing.
However, the removal of fuel subsidy over the years has been a
gradual one, until recently early this January, 2012 when the government
embarked on a drastic removal of the subsidy – though it was claimed to be a
partial one (N85 to N120 and later reduced to N97). Whether the removal was
partial or not, the issue raised was that the timing was wrong i.e. January,
there was no ‘safety net’ put in place before its removal, those responsible
for the diversion of the subsidy money should be brought to book instead of the
removal amongst other issues. Again, the government that the removal was to
allow the free hands of demand and supply to determine market prices so as to
restore efficiency in the production, refining, distribution and ultimately
force price of fuel down just like in telecommunication industry.
On the other hand, as the debate continued little attention was
paid to the impact of such removal would have on the balance of payment of
Nigeria which is the long run effect.
In a government circular of 13th November,
1980 from petroleum inspectorate Lagos to the Chief Engineer NNPC
Port-Harcourt. It was started you may recall that government indicated
about two (2) years ago to encourage Nigerians to participate in the
distribution and marketing of petroleum products.
To this effect about 260 two hundred and sixty Nigerians have been
given approval by the commercial division of NNPC as independent marketers. He
then confirmed on investigation that the total number of the people given
approval (provision) to operate as independent marketers in Nigerian is (491).
1.2 STATEMENT OF PROBLEM
The Nigerian economy over the years has been programmed to revolve
around the supply of „cheap‟ petroleum product. An average household in
Nigeria depends on subsidized by-products of crude oil such as petrol and
kerosene for domestic and commercial use. This dependence is not helped either
as public electricity supply from PHCN is epileptic. Almost every home and
business is powered by generators fired by subsidized petrol. The few small
scale businesses such as Hotels, Barbers, Welders, Hair dressers, Pepper
sellers, Cool-room owners, Food sellers, Private and Government hospitals etc
all rely on subsidized fuel. Transportation costs for instance have gone up and
this will result in spiral effect on other sectors- all other businesses in
fact revolve around the transport sector. It is very obvious that subsidy
removal will worsen the country’s already inflation rate. In fact it w ill
result in hyper inflation as prices of goods and services are bound to
skyrocket beyond the reach of many. Even the Naira will not be spared, because
it will further depreciate in value as much money will be chasing fewer goods.
Creditors also lose during inflation because if they lend out money when there
is no inflation and the prices are moderate or stable, the moment inflation
sets in the value of that money to the creditor is lost.
For oil marketers, who are paid the difference between
international product prices and the subsidised price of domestic fuel (N
65/litre), there is an incentive to import even more product when prices are
high. In recent years, balance-of-payments and fiscal strains have been evident
Also on the parts of marketers marketing of
petroleum products in the country appeared not to have profound its function
very satisfactorily. Too much shortages of profit by the independent marketers
and like in the oil prices as was stated by the federal government before now.
Inappropriate refining and distribution costs of the petroleum products and
reduction in the crude oil allocation.
1.3 OBJECTIVES OF THE STUDY
The objectives of the study refers to the
possible solution, goals, targets intended to be achieved by carrying out this
research work these are.
find out why there are problems in the marketing of petroleum products in
Nigerian as a result of subsidy removal.
find out the strategies adopted to ensure a lasting solution to the problems.
To Know the kind of polices being imposed on to solve this problems of
marketing petroleum products within Nigerian.
4. To determine if fuel subsidy help in
making petroleum products available to cushion the effect of actual market
prices of the products on the general populace.
5. To make some preferable recommendation on the issue at
1.4 RESEARCH QUESTIONS
The research question are associate with this research:
you think markets encountered problems in petroleum marketing as a result of
fuel subsidy removal..
strategies should marketers adopt?
government graft a policy reguarding marketing of the petroleum?
you think removal of fuel subsidy help in making petroleum to all sector of the
1.5 RESEARCH HYPOTHESIS
encountered much problems in marketing of petroleum products because of removal
encountered do not problems in marketing of petroleum products because of
removal of subsidy.
Removal of fuel subsidy helps in fight the scarcity of petroleum
Removal of fuel subsidy do not help in fight the scarcity of petroleum
1.5 SIGNIFICANCE OF THE STUDY
We need is more education on what is happening! The fuel subsidy
is one way that our military leaders used to keep us down thereby distorting
our economy and making us unable to key into the emergent global economy. A
section of the country abhors competition and merit and so they sustained it
thereby depressing Naira value and making Nigerians only 419 pariahs in global
trade. But to be relevant in the global economy you must be competitive.
Subsidy is a facade a smokescreen for inefficiency and corruption by the
unenlightened who want to rule over the educated. It gives them the room to
bunker fuel and refine in foreign countries giving away Nigerian jobs and
selling currency at the black market to rule Nigeria while poverty and
unemployment reign. We cannot continue to pick crumbs in a table richly laid
for us by God. We must learn not to depend on such bait of Boko Haram or we
would be subsidizing our slow demise in the hands of an un-Godly set of people.
research work would go a run way to education Nigeria on why they should bear
and admit the removal of subsidy. It will also help to know why they
should have their own refries in the country instead private refries.
On the part of
marketers, they would admit also excess gain on their individual refries would
rather disrupt the economic growth and development of the country.
shall be relevant to marketing student in general in market
research on similar topic.
1.6 SCOPE OF THE STUDY
The scope of this study is problems fuel subsidy removal and
marketing of petroleum. As a result, the study is restricted to the Eastern
parts of the country such as Enugu.
1.9 DEFINITION OF TREMS
sum of money granted by the government or a public body to assist an industry
or business so that the price of a commodity or service
These are the group of Nigerians given license by NNPC to operate petroleum
business in the country.
Existing oil marketers:-
The eight major oil companies engaged in oil retailing in the country
before the appointment of the independent marketers.
There are – National, Mobil, Texaco, Total, Agip, African,
Petroleum, Eif and Unipetrol.
petroleum refers to fuel embracing components. They are:-
Premium motor spirits (pms) called super
Automatic Gas oil (AGO) called Diesel
Dual purpose kerosene (Dpk) called kerosene
Nigerian National Petroleum company
This is the administrative arm of the federal government
which come into existence in 1977 and which are charged
with the responsibility of controlling the petroleum industry in
TERMS AND CONDITIONS APPLY
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