ABSTRACT
This
project is aimed at examining how petroleum products are marketed and the
problems associated in doing so. The objectives of this work among others are
to examine if petroleum products in Benin depot are adequately to be
distributed to sales outlet, and if favourism and corruption affect the
distribution of these products. To resolve these contention issues, data were
collected through questionnaires and oral interview and these data were
analyzed through chi-square. When the hypotheses formulated were tested and
analyzed, it was observed that, petroleum products are inadequate for
distribution at Benin depot NNPC controls the distribution of the product and
there is too much favouritism and corruption in the distribution of the
products. Based on the above findings, some recommendations made are that,
government should invest more in the petroleum sector, private marketers should
make contentious efforts to implement governments efforts, but to mention a
few.
TABLE OF CONTENTS
Title
Page
Certification
Dedication
Acknowledgements
Abstract
Table
of Contents
Chapter One:
Introduction
1.1
Background to the Study
1.2
Statement of Problems
1.3
Research Questions
1.4
Objectives of the Study
1.5
Statement of Hypothesis(es)
1.6
Significance of the Study
1.7
Scope of the Study
1.8
Limitations of the Study
1.9
Definition of Terms
Chapter Two: Review of
Related Literature
2.1
Introduction
2.2 The Nature of Marketing of Petroleum Product
2.3
Allocation of
Product of Marketing at the Benin Depot
2.4 Relevant Documents
used at the Depot
2.5 Nigerian
National Petroleum Corporation Marketers Daily Loading Analysis
2.6 Summary of the Chapter
Chapter
Three: Research Method and Design
3.1
Introduction
3.2
Research Design
3.3
Description of Population of the Study
3.4
Sample Size
3.5
Sampling Techniques
3.6
Sources of Data Collection
3.7
Method of Data Presentation
3.8
Method of Data Analysis
Chapter
Four: Data Presentation, Analysis and Hypothesis Testing
4.1 Introduction
4.2 Data Presentation
4.3 Data Analysis
4.4 Hypothesis Testing
Chapter
Five: Summary of Findings, Conclusion and
Recommendations
5.1
Introduction
5.2 Summary of Findings
5.3
Conclusion
5.4
Recommendations
References
Appendices
CHAPTER ONE
INTRODUCTION
1.1
Background to the Study
Petroleum
product marketing and distribution began in Nigeria at the turn of the country
by simony vacuum oil company (the producer of moils) which marketed such flower
kerosene product marketing has expands to the extent that seven major companies
namely, AP, OANDO and a number of independent are now in the trade. NNPC was
established in April 1st 1977
as a manager of the Nigerians National co-operation and federal ministry of and
power NNPC by law manager the joint venture between the Nigeria federal
government and another of foreign multinational co-operation, which includes
vagal Dutch shell, Exxon Mobil, Agip total final ELF, chevron and Texaco
(through the merge with chevrons) through collaboration with the Nigeria
government conduct petroleum exploration and development. The lead of the
Nigeria wing of transparency international say salaries for workers are too low
to prevent graft.
As
from September 2007, Nigeria president Umaru Musa Yar’adua plans to split the
company into five (5) new
companies. The NNPC tower in Abuja is the headquarter of NNPC. It is located on
Herbert Macaulay way, central business district, Abuja NNPC also has zonal
office in Lagos, Kaduna, Port-Harcourt and worried there is also an
international office located in London, united state.
In
May 2009, the NNPC identified that the Niger Delta unrest, and no impact on its
business despite fight between government and bevels in this cil producing
areas. Around 1975, the marketing product was entirely in private hand, owing
to the quick recovery from civil war. The overall expansion of economic
activities and unprecedented exploring in the demand for petroleum product in
the 1970s the private companies were able cope with the domestic demand for
product and the severe shortage that ensure all over the country constituted a
major be title neck to further development. This promoted government to venture
into petroleum product distribution and marketing.
Before
1965, all petroleum product
consumed in Nigeria were improved. In that year, all most 25,000 barrel per day
were produced, Port Harcourt refinery was built by federal government and
British petroleum through 1962 government which created the Nigeria petroleum
refinery company. The refinery initially met the domestic need for white
petroleum product and exported some qualities of product to African countries
and high pure fuel oil do the united state owing to the economic expansion in
the 1970s.
The
demand for premium gasoline and gas oil recovered on unprecedented manage
annual growth rate of 30% between 1947 and 1977. To meet the domestic need
interior arrangement were made from 1975 to refine Nigeria’s rude oil in
curacaos and Rotterdam for importation of the product to Nigeria. As at 1978
about 175,000 barrels per day were involve. This off shore refining arrangement
continued until two new refineries were commissioned in warn in 1978 and Kaduna
in 1980 the two refineries have a combined processing capacity of 20,000
barrels per day. Recent forecast, however, indicate further increase in the
domestic demand of petroleum product and the fourth National Development plan
provides for the building of two more refineries. Petroleum product pricing was
not informed through the country. The pump price depended on point of sales and
this affected distribution and even development of the country. The oil
marketing companies naturally concentrated their activities in area where cost
of distribution was lowest and profit was high. Lagos and Port-Harcourt area
were serves which the hinterland was not product adequately supplied encourage
even distributed of product to all parts of the country.
Government
introduced the uniform pricing system in October, 1943 for all grade of product
and to differentials in the cost of product the decree 9 was promulgated,
setting up the petroleum equalization find management board with the following
function.
i. To retraining surplus revenue recorded
from oil marketing companies.
ii. To reimburse companies for losses offered
as a result of sales of product at uniform prices all over the country.
iii. To recover the differences between the
landed costs imported product and the open market price in the country.
1.2
Statement of Problem
It
is on record that petroleum resources contribute about 70 percent of Nigeria
across National product and about 80 percent of her export earning. Also
petroleum resources have a lot it impact on national productivity. As a result,
the distribution of the essential aspect of productive. Resources need to be
efficient in not only in personal but also in terms of another aspect of
logistics.
To
this end, the study attempt to provide answers to the following question what
is responsible for the scarcity of petroleum product at different time in the
country that are the types of markets and distribution channels involved in the
marketing the activities of channels members.
What
are the motivating factors and to what extent can the factors be addressed in
order to ensure staff to duty and higher productivity?
1.3
Research Questions
The following research questions will be useful to
understand the topic under study.
i.
Is the volume
of petroleum products at Benin depot always adequate for even distribution of
sales outlets?
ii.
Is the distribution
of petroleum adequately controlled by NNPC?
iii.
Are
favouritism and corruption significant contributions to inefficient petroleum
products distribution?
1.4
Objective of the Study
The objectives of this study are;
i. To
examine if the products in Benin depot are adequate to distribute to sales
outlets.
ii. To
examine if the distribution of petroleum products is adequately controlled by
NNPC.
iii. To ascertain
if favouritism and corruption contribute significantly to inadequate
distribution of petroleum products.
1.5
Research Hypotheses
Hypothesis
I
HO:
The volume of petroleum
product at Benin depot is always inadequate for even distribution to sales
outlets.
HI.: The volume of petroleum
product at Benin depot is always adequate for even distribution to sales
outlets.
Hypothesis
II
HO: The distribution of
petroleum is inadequately controlled by NNPC.
HI: The distribution of
petroleum product is adequately controlled by NNPC.
Hypothesis
III
HO: Too much favouritism and corruption are not
significant contributors to inefficient distribution of products.
HI: Too much favouritism and corruption are significant contributors to
ineffective distribution of products.
1.6
Significance of the Study
The
study will serve as guide to Edo people in obtaining utility from the purchase
of petroleum product and ensuring availability of the product at all time. It
will also stimulate other record with the attempt in finding out more
specialized work n the area of distribution pattern and management especially
in the marketing aspect of the organization. These are yet to receive of this
study while contribute significantly to the development of corporation and
better owing the society.
1.7 Scope of the Study
This
research work titled marketing of petroleum product in Edo state is being
undertaken in view of problems that have been faced by members of Nigerian
public especially people in Edo state in recent times.
The
production and utilization of petroleum product involves a number of activities
among which is marketing effort would be made through this study to examine the
most critical aspect of the marketing activities in the pipeline and product
marketing company (P.P.M.C). The problems being faced or being experienced by
people of Edo state as regard the consumption of petroleum product is a
repletion of the market situation in all the company sale like time and
financial constraints. It is only wise that a representative sample of the
consumer population is studies. What ever are the findings could at best be
generalized for the total population. Since as the same goes, Edo state is like
mini Nigeria.
The
research study could be designed to survey opinions of the middle men as well
as member of management of the subsidiary.
The
study would cover a period would have being
inadequate. The time limit is in compliance with the directive of the Federal
Polytechnic Auchi. Other necessary information would be obtained form secondary
data, within and outside the Polytechnics library and also in the P.P.M.C.
1.8 Limitations of the Study
Several
factors combined to limit the extent and scope of this research project some of
those factors include.
Time:
Apart
from the time needed for this research work, the researcher had his lectures
and other academic.
Exercises
to contend with funds: Funds was also limiting factor and
as such the research could not travel extensively to collect all relevant data.
Another factor worthy of mention is the uncooperative attitude of activities
and in responding to the research questionnaire.
However,
time and funds involved in traveling posed the major problem, because of the
above constraints (time and resources) involved in actually exhausting
everything concerned about this topic; the researcher had a limit the scope of
coverage of this study to the marketing and distribution of petroleum
product. A case study of Benin Depot, Edo State.
1.9 Operational Definition of Terms
For
the proper understanding of this research work certain technical term
applicable specifically to petroleum’s operations or marketing are explained
briefly below:
Allocation:
This
is a programme of shorting crude oil or petroleum products of short supply on a
contractual or historic basis.
Crude
Oil: Is any oil (other than oil extracted by destructive
destinations from coal bituminous shell or other stratified deposits) won n
Nigeria either in natural state or after the extraction of water, and or foreign
matter or substance there from.
Depot:
NNPC
storage terminal located nation wide from where marketers can buy petroleum
product for further distribution.
Distribution:
This
is a process by which agencies or other facilities are used to accomplish the
movement of product from the production place to the industry or final
consumption point.
Discovery:
Covers
an exploratory (Wild cat) well through which a new deposit of oil is found, it
is also referred to as upstream.
Automotive:
Gas Oil (AGO) otherwise known as diesel.
Filling
station:
These are station with dispensing pumps and sales room built to specification
for dispensing white products to consumers and also rendering related service.
Independent
Marketers:
Enterprising Nigeria encouraged to participate in petroleum product
distribution example include general gas, phoremix, niddoge gas e.t.c.
Marketers:
They
are individuals of organization who buy the petroleum product from the NNPC
depot and supply to their filling station or directly to their customers.
Marketing:
Is
the performance of business activities that direct the flow of goods and
service from producer to consumer or user.
Major
Marketers: These are marketers with large financial
capability and they completed control the marketers are total, national,
Texaco, chevron, Agip African petroleum (AP) Mobil.
Petroleum:
This
is a part of hydrocarbon that occur naturally in a crude oil other wards, it is
a mineral oil (Rock oil) normally a liquid mixture consisting essentially of
many different hydrocarbons, occurring naturally and haling a wide range of colours
yellow to black with characteristic odours.
Pipeline:
Is
the system of transporting crude oil. Trunk line collect an oil producing
refineries.
Tank
farm: This
is an enclosed premise in which huge storage tanks fabricated will steel are
built for storing petroleum product which are to be the markets.
Trunks:
These
are tanker vehicles retailers used in transporting petroleum product byroad
from the deposit to filling station and direct to the final consumers.
White
Products: These are the petroleum product under review this
research work. They include P.M and A.G.O and D.P.K.
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