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
on this issue were collected through survey (questionnaire schedules) and that serves
as a primary source of data to complement the secondary materials.
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.
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
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 political
Modern equipments 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
Constant power supply should be
encouraged to ensure a steady pumping, Loading and easy marketing of petroleum
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
Statement of problems
Scope of study
CHAPTER TWO: REVIEW
OF RELATED LITERATURE
The concept of
THREE: RESEARCH METHODOLOGY OR
Sources of data
Method of data
allocation, administration and response rate.
questionnaire and interview schedules.
FOUR: PRESENTATION AND ANALYSIS OF DATA
FIVE: SUMMARY OF FINDINGS,
RECOMMENDATION AND CONCLUSION
CHAPTER ONE: INTRODUCTION
OF THE STUDY
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 fuel.
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.
Pedestrians/inhabitants 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”
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 satisfactory.
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
Unscrupulous or unwholesome practice
engaged on the tanker and truck drivers who at any slight provocation embark on
industrial action and disturb the oil distribution and marketing.
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
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.
Insufficient refineries 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.
Inappropriate refining and
distribution costs of the petroleum products and reduction in the crude oil
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.
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.
Furthermore, petroleum 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
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.
This study will attempt on
investigate and enable us to answer the following research questions will the
appointment of independent marketed help to improve distribution of petroleum
product in Nigeria.
Will it be an effective measure to stop or alleviate fuel shortage?
Will it result in a greater profitable business to indigenous marketers
Will this appointment evaluate the effectiveness of NNPC in grapping with
the petroleum or fuel scarcity?
Will it attempt to find out what causes gasoline shortages or fuel
scarcity and make recommendations?
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.
Some oil company official attempted
to remain anonymous probably for security reasons. They found it difficult to
deluge some information, which they regard as “official secret”.
Repeated calls were made on officials at NNPC thus
utilizing more time than was anticipated.
Many petroleum dealers and independent marketers were
suspicious of the study and hesitated at times before responding to the
There was lack of sufficient information by way of
literature extracts on the subjects from the available library materials.
The financial resources affected the study, as there
was no money to cover all that are required.
marketers:- These are the group of Nigerians given license by NNPC to
operate petroleum business in the country.
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.
products:- Petroleum refers to fuel embracing components. They are:
spirits (PMS) called super
oil (AGO) called Diesel
kerosene (DPK) called kerosene
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 the country.
Deposits or supply point:- They are the locations where petroleum products
are purchased by marketers from the government.
security: This is boarding of petroleum products with the aim of petroleum
products with the aim of selling at prices above the government controlled