The Problems And Prospects Of Marketing Petroleum Products In Nigeria (a Case Study Of Nnpc Nigeria), Abstract
The Study On The Problems And Prospects Of Marketing Petroleum
Products In Nigeria Seeks To Find ...
The study on the problems and prospects of marketing petroleum
products in Nigeria seeks to find out what causes or generated problems in the
oil industry and tries to find a lasting solution to it for the benefit of all
the public or consumers.
Data on this issue were collected through survey (questionnaire
schedules) and that serves as a primary source of data to complement the
These data were analyzed and some interesting revelators were made
for e.g. it was discovered that constant vandalization of oil pipelines,
hoarding of petroleum products, striting workers constant power outage etc.
contributed greatly to these problems.
It was also reveled that the independent marketers contributed
immensely to the marketing of petroleum products in the country considering the
percentage of Petroleum products such as pms (super), DPK (Kero) and AGO
(Diesel) that are lifted through them to the consumers.
The data revealed the
important role, which they play by distributing products to areas, regarded as
unattractive by existing oil companies thereby reducing problems of artificial
scarcity and marketing of petroleum products.
The study recommends
that more refineries should be built in the country to support the existing
ones and locate them well on the basis of economic consideration rather than
should be installed together with refineries to ensure optimum capacity workage.
The NNPC should open
supply depots for 24 hours daily and motivate their staff to work effectively.
Loans should be encouraged to build more filling stations at desired locations
by independent marketers.
Constant power supply
should be encouraged to ensure a steady pumping, Loading and easy marketing of
Vandalization, which is
a menance to the government, should be properly checked and stopped by ensuring
strictness and security are the oil producing areas.
The oil producing areas
should be properly compensated and motivated to ensure an end to vandalization.
The first chapter
indicates how and when the problems of scarcity and marketing emanated. The
problems can hardly be appreciated without the background.
The research involves
it review, which was extracted from journals, magazines, Newspapers, textbook,
symposium and Government statement.
Chapter three deals with research methodology. It includes sources
of data, methods of data collection, population of study etc.
Chapter four presented
and analyzed the data collected in tables and figures while finally the chapter
five summarizes the findings, conclusions and recommended some possible
solutions to help put an end to marketing problems in petroleum products.
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
1.1 Background of the
1.2 Statement of
1.3 Objective of
1.5 Scope of
1.6 Significance of
1.7 Definition of
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.3 Nigeria Enterprises Promotion
2.6 Pengassan Warri Speak on Vandalization
2.7 Text Book
2.8 The concept of Distribution
RESEARCH METHODOLOGY OR DESIGN
3.2 Area of the
3.3 Population of
3.4 Sample and sampling Techniques
3.5 Instrument of Data
3.6 Validity of Instrument
3.7 Reliability of Instrument
3.8 Questionnaire Allocation, Administration and
Method of Data Analysis
FOUR: PRESENTATION AND ANALYSIS
4.1 Data Presentation and Analysis
CHAPTER FIVE: DISCUSSION AND CONCLUSION OR
5.1 Discussion of
5.2 Conclusion of the
5.4 Implication of the Findings
5.5 Suggestion for further Studies
1.1 BACKGROUND OF THE STUDY
On various occasions
between 1974 and 1978, many part of Nigeria were hit by frequent and acute
shortage of fuel motorists spent hours queuing at the few filling stations that
were open. Others resorted to obtain fuel at exorbitant price called “black
market prices”. Most offices were empty as key officer drove out in search of
The administrative and
economic life of the nation became disrupted. Transport fare sky rocketed and
prices of food stuff rose as food sellers had to pay for transporting their
commodities/goods to the market.
found it difficult to get transportation to their destination.
The question on the
lips of many people was “what is the cause of fuel shortage in the country?
Some believe that tanker drivers and fuel haulage contractors to the greedy
petroleum dealers who allegedly cashed in one reason or the other to board their
fuel supplies only to sell in “black markets to willing buyers at higher or
Another reason given
for this shortage was the break down on some storage equipment at the fuel
deposits. It was them an Irony that Nigeria which is raped as the world
producers of oil and which has 3 refineries with a net work of fuel pipeline
and 19 main oil depots for easy distribution of fuel throughout the country
should experience frequent shortage most of her towns.
The oil dealers that
had the responsibities of distributing the fuel products to the final consumers
operating under the eight oil marketing companies such as Mobil, Texaco,
African Petroleum (AP), EIF, Total Unipetrol, Nationals, Agip seemed not to
provide the answer to this scarcity.
The retail outlet
survey conducted in 1977 by the NNPC to find out the number of retail outlets
and filling stations showed that there were only 1352 retail outlets for
marketing and distribution of petroleum products. It now showed the percentage
share of oil marketing companies on a state basis throughout the country. For a
coming as big as Nigeria which has a surface area of approximately 356, 670
square miles or 913, 075 square kin of Land area.
This study and other
subsequent events led the government to think that inadequate distribution of
outlets in the country on the part of the major oil companies or the oil
marketers could be the source of frequent acute shortage of petroleum products.
By 1980, the government
through the agent NNPC advertised for independent marketers a new breed of
Nigerians interested in petroleum business to apply for government recognition
to participate in the petroleum distribution trade in the country.
In a government circular of 13th November
1980 from petroleum inspectorate Lagos to the Chief Engineer NNPC Port
Harcourt. It was stated, “you may recall that government indicated about two
(2) years ago to encourage Nigerian to participate in the distribution and
marketing of petroleum product.
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 people given approval (provisional) to operate as
independent marketers in Nigeria is “491”
1.2 STATEMENT OF PROBLEM
Many parts of Nigeria
were hit by frequent and acute shortage of fuel on various occasions. The
resultant effects were so numerous that the administrative and economic life of
the nation became disrupted. The problem is that the existing oil marketing
companies charged with the sole distribution and marketing of petroleum
products in the country appeared not to have profound this function very
Ethnic problem among
the oil producing areas who demands much more than their compensation from the
federal government there by engaging on the vandalization of oil pipes and oil
unwholesome practice engaged on the tanker and truck drivers who at any slight
provocation embark on industrial action and disturb the oil distribution and
Unavailability of a
good crop of well trained highly motivated and knowledge enable leader managers
and staff since they look over from the experts.
Constant smuggling of
the petroleum products by the unfaithfully staff of NNPC in their quest to earn
hard currencies. This equally contributes to the distribution and marketing of
petroleum products. Misplacement of priorities by the post governments
and NNPC coupled with the negative behaviours of NNPC officers and insufficient
storage or evacuation of the product.
Lack of maintenance and
finding to NNPC personnel, interruptions on the product supply, sharp and
unpatriotic practices of the marketer in the distribution of the products.
and filling stations for the industrial users also contributed for the problems
of marketing petroleum product etc.
Too much declaration of
huge profit by the independent marketers and like in the oil price as was
stated by the federal government thereby engaging onto black market business
and credit instabilities in the price of petroleum products.
and distribution costs of the petroleum products and reduction in the crude oil
1.3 OBJECTIVES OF THE STUDY
The objectives of this
study refers to the possible solution, goals, targets intended to be achieved
by carrying out this research work these are
- To find out why there are problems in the
marketing of petroleum products in Nigeria.
- To find out the marketing strategies adopted to
ensure a lasting solution for the problem.
- To know the kind of police being imposed on them
to solve this problems in marketing petroleum product within Nigeria.
- To know whether NNPC workers marketers are well
- To find out if it is caused by the constant or
frequent change of government.
- To find out whether the oil producing areas are
- To also find out what government has contributed
to ensure that this artificial scarcity is solved.
1.4 RESEARCH QUESTIONS
1. What are the problems associated with
marketing petroleum product in Nigeria.
2. How can we proffer solution to these
3. How does the future of petroleum
product marketing project look like in Nigeria.
1.5 SCOPE OF STUDY
The study on the problems and prospects of marketing petroleum
products is wide, as a result. The study is restricted to the eastern
parts of the country such as Anambra, Rivers Imo, Abia and Enugu State.
This study x-rays the problems associated with marketing of petroleum products
and their solutions it also discussed what prospect of marketing petroleum
products in Nigeria.
1.6 SIGNIFICANCE OF STUDY
Petroleum products are
very essential as a source of economic development. It appears to be a
defensive factor in the economic development.
In an article in
business time (March 8, 1982) it was averred that Nigeria oil industry accounts
for 90% of Nigeria total “Gross Domestic Product (GDP).
Therefore, a study bordering on the petroleum business in Nigeria
is significant especially to the inhabitants of this country because of the
role of the oil sector to the economy.
scarcity affects everyone in the country whether directly or indirectly.
Gasoline is a source of power for different purpose for various mode of
transportation, electricity power, for different purpose for various mode of
transportation, electricity power and engages many in productive employment.
Lots of people in the
society would look towards to uninterrupted supply of petroleum product at
every point in time.
This study is also
important for the society in order to examine whether many Nigerians are
participating actively in the oil economy of the country through the business
as was stipulated in the Nigeria enterprises promotion Decree of 1972.
1.7 DEFINITION OF TERMS
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 petrol retailing in the country before
the appointment of the independent marketers.
Their are- National,
Mobil, Texaco, total, Agip. African, petroleum, ELF 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 (NNPC):
This is the administrative arm of the federal government which
comes into existence in 1977 and which was charged with petroleum industry in
Government Deposits Or Supply Point:-
They are the locations where petroleum products are purchased by marketers from
Artificial security: This
is boarding of petroleum products with the aim of petroleum products with the
aim of selling at prices above the government controlled prices.
TERMS AND CONDITIONS APPLY
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