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The research assessed the problem of Petroleum Product Distribution in Nigeria. As such, the research questions that guided this examine are: What are the constraints militating towards Nigeria’s state owned refineries and petrochemical plants as well as affiliated regulatory agencies in Petroleum product distribution What are the issues associated with the distribution of petroleum product within the downstream sector 120 respondents have been selected utilizing the random sampling technique to select 50 unbiased petroleum product marketers, 50 staff from PPMC and 20 staff from NNPC and 20 workers from NNPC. The mean (X) was used to analyze the info whereas chi-sq. was used to test the hypotheses. The evaluation reveals that the frequent pipeline vandalization, poor upkeep of petroleum infrastructure, in addition to Inefficiency and Corruption of government officials and underneath-utilization of Refineries by NNPC are the principle constraint militating towards Nigeria’s state-owned refineries and petrochemicals plants in addition to affiliated regulatory businesses in petroleum product distribution. Diversion of petroleum products, hoarding of petroleum products, using old tankers which are in a poor state of operation and poor state of street in Nigeria, sabotage, crude oil and petroleum product bunkering, petroleum product adulterations are some of the challenges militating towards petroleum product distribution from the side of main and independent entrepreneurs of petroleum product. As such, it was recommended that the Nigerian Nationwide Petroleum Company (NNPC) should diversify its export/output baskets via satisfactory downstream activities. This may improve self-enough in petroleum products and financial development. Nigeria’s gasoline shortages can by no means be solved by importing more gas. Importing fuel is a brief (quick time period) resolution. Constructing more refineries in Nigeria to meet our home consumption and possibly export to neighboring nations; undoubtedly is a positive resolution to Nigeria’s perennial gas shortages.
1.1 Background to the Examine
The Nigerian petroleum industry has been described as the largest amongst all industries within the nation. This is probably as a consequence of the idea that petroleum is one in every of the foremost sources of natural gas etf news power worldwide. The scale, international characteristic, and position assumed by the petroleum business had been famous to have originated from the notion that petroleum is versatile as it at the moment satisfies a large number of power and related wants. Petroleum is essentially the most very important source of vitality, providing over 50 percent of all commercial energy consumption on the earth. The revenues obtained from crude oil in Nigeria are of absolute advantage to expenditure commitments on various initiatives on the native, state, and federal ranges. The Nigerian economy depends heavily on the revenue derived from Petroleum products, as they provide 70 % of authorities income and about ninety five % of international exchange earning. Apart from this, the contribution of petroleum to nationwide improvement is many and various; employment era, overseas change earnings, revenue technology, industrialisation, and enhancements in other economic variables.
The Nigerian economy is starkly dominated by the petroleum industry for the reason that oil boom of the 1970s. Therefore, its economic development and improvement is also dependents on the manufacturing and consumption of Petroleum product and therefore, a detailed connection between the state and oil in Nigeria (Okunroumu, 2004; and Falegan & Okah, 1980). For instance, Wurthmann (2006) famous that oil accounts for about 40 per cent of Nigeria’s GDP, 70 per cent of federal government revenue and ninety two per cent of its foreign trade earnings. Also, day by day home demand for Petroleum merchandise stands at 530,000 barrels per day (bpd) which is eighty five,000 bpd greater than the by no means-made 445,000 bpd put in refining capability. As a result, Petroleum merchandise supply stays an acid check for successive governments in Nigeria. With the inception of democracy in Could 29th, 1999, the supply of Petroleum merchandise has improved but not and not using a price – frequent increases in Petroleum merchandise value but demand of Petroleum product continues to be greater than provide (Sabo and Igwo, 2007:105).
In consequence people clamor for deregulation of Petroleum product. In Nigeria, the 2003 deregulation of the sector is predicted to provide room for competitors and maximize supply sources which would rework to price discount and deflate scarcity. Prior to this moment, makes an attempt were made to ask non-public corporations into the sector, most of whom, together with NNPC itself, sought for the importation of Petroleum merchandise instead. But still fell out as a consequence of regulated home prices and a whooping amount as subsidy to the shoppers (Nwafor, M. et al, 2006:Eleven). The private buyers were also not prepared to take over the dilapidated, disrepair, and poorly performing state owned amenities (refineries, depots and pipeline system). Thus, the sector is so plagued by, not solely, low capacity utilization of the midstream sector, insufficient distribution (pipeline, rail and road) networks and storage services, merchandise diversion and adulteration, black-advertising and marketing, fire incidents, smuggling as well as inefficient monopolistic/state management on costs (Oriyoosu, 2007:113-a hundred and fifteen
Hence petroleum distribution is constraint by issues arising from poor upkeep of amenities and infrastructure by government; merchandise adulteration and pipeline vandalization; low investment alternatives; sabotage by cartels, giant-scale smuggling of crude and refined oil as well as the importation of Petroleum merchandise.); rampant black markets, e.t.c. as a consequence of inefficient market structure brought on by the monopolistic management of the state on price (Oriyoosu, 2007:113-a hundred and fifteen).
Consequently widespread Petroleum merchandise shortage and unending price hikes are the each day studies bringing untold hardship to the rapid growing Nigerian populace. Subsequently, the low Petroleum merchandise from native refineries, inadequacy of Petroleum merchandise importation at international prices, and significantly, inefficiency of domestic costs of Petroleum merchandise set by the state and quite a few constraint that have not yet being found by previous researches, stand out as the fore setbacks to petroleum distribution in Nigeria. It’s towards this background that this examine is triggered.
1.2 Statement of the problem
Many research efforts in the realm of petroleum distribution in Nigeria have handled macro issues, in addition to conduct and performance of selling activities as they relate to efficiency indices reminiscent of market share, growth, efficiency and effectively being of customers and clients. However there are few researches on the problems of petroleum distribution in Nigeria (Okoh,2012).
Hence the problem of this study is to investigate the problem of petroleum distribution in Nigeria by investigating issue militating against Petroleum product distribution from authorities refineries as well as from natural gas etf news the aspect of main and unbiased marketers. In this regard the research is focused on problems with sabotage of petroleum infrastructures and unlawful bunkering as well as downside of ineffective regulation of Petroleum product within the downstream sector and inefficient utilization and maintenance of Nigeria’s state-owned refineries and petrochemicals plants in Nigeria and the institutionalised corruption of government officials and impartial entrepreneurs answerable for Petroleum product distribution.
1.3 Research Questions
i) What are the constraint militating against Nigeria’s state-owned refineries and petrochemicals plants in addition to affiliated regulatory businesses in Petroleum product distribution
ii) What are the issues related to the distribution of Petroleum product within the downstream sector
1.Four Targets of the Study
The central goal of the research is to look at the issue of petroleum distribution in Nigeria. natural gas etf news The particular objective are:
i. To determine the elements militating in opposition to Nigeria’s state-owned refineries and petrochemicals plants in Petroleum product distribution.
ii. To search out out the issues associated with the distribution of Petroleum product in the downstream sector.
1.5 Assertion of Hypotheses
To provide this work a sense of route, the following pairs of hypotheses have been thought-about:
1. H0: Petroleum product distribution in Nigeria’s state-owned refineries and petrochemicals plants is not hampered by pipeline sabotage and illegal bunkering as well as institutionalised corruption of authorities officials.
H1: Petroleum product distribution in Nigeria’s state-owned refineries and petrochemicals plants is hampered by pipeline sabotage and unlawful bunkering as well as institutionalised corruption of authorities officials.
2. H0: Petroleum product distribution within the downstream sector is not related to hoarding and diversion of Petroleum products by major and unbiased entrepreneurs.
H1: Petroleum product distribution in the down stream sector is constraint with the problem of hoarding and diversion of Petroleum merchandise by main and impartial marketers
1.6 Significance of the Research
This research is of great relevance to the Pipeline and Product Advertising and marketing Company (PPMC), petroleum marketers and shopper. This relevance applies to researchers and students of Petroleum merchandise and its distribution course of. The Federal Government is likewise a beneficiary of this research as they’ll be aware of the most cancers eating up the distribution course of and a greater method to tackling it.
Finally, this examine is of nice relevance to the general public as they are enlightened on the process of distribution and likewise the dangers related to the disruptions of the graceful flow of these merchandise pipelines.
1.7 Scope of the Research
The examine covers the Nation’s Pipelines and Product Marketing Company’s network nationwide. The interval coated is from 2006 – 2011.