Management Problems Of Petroleum Products
(A Case Study Of Pipline And Product Marketing Company Enugu)
Managing petroleum products presents a myriad of challenges, ranging from environmental concerns to logistical issues. Environmental degradation, caused by spills and emissions during extraction, transportation, and usage, is a significant problem. Additionally, the finite nature of petroleum resources necessitates efficient management to ensure sustainability and mitigate supply chain disruptions. Balancing fluctuating demand with production and distribution complexities further exacerbates the challenge. Moreover, geopolitical tensions often arise due to competition for control over oil reserves, leading to volatility in prices and geopolitical conflicts. Furthermore, regulatory compliance and safety standards pose constant challenges to companies operating in the petroleum industry. Addressing these multifaceted challenges requires holistic strategies that prioritize sustainability, innovation, and international cooperation in energy management and policy-making.
This project or research work as investigated the management problems of petroleum products in Nigeria ( A case study of PPMC Enugu Depot) which is located in Enugu East Local Government Area of Enugu State.
The major objective of this project or research was to find out those management problems of petroleum products in Nigeria. To accomplish the above objective, therefore the work or project has to be decided into five chapters. The first chapter introduces them. It points out the background of the study and scope. While chapter two reviews, the related literature and the definitions.
However chapter three constitutes the main body of the project. There, also highlighted on the methodology which comprise, area of study, population of study, sample technique, instrument for data collection, validity and reliability of the instrument. In chapter four, it deals on data presentation and analysis and how the respondents assured their question as show in the table and pie chart.
Thereafter, chapter five summaries all the write – up by way of findings, recommendation, limitation of study, suggestion for further study and conclusion
Finally, is the reference as it concerns this project?
Title page
Approval page
Dedication
Acknowledgement
Abstract
List of figure
CHAPTER ONE
1.0 Introduction
1.1 Background
1.2 Statement of problem
1.3 Purpose of study
1.4 Research Question
1.5 Significant of study
1.6 Scope of study
CHAPTER TWO
2.0 History of petroleum in Nigeria
2.1 Historical background of pipelines and products marketing company.
2.2 Allocation of petroleum products.
2.3 Accountability payment
2.4 Petroleum products Ex – Depot price
2.5 Loading process
2.6 Mode of distribution
2.7 Pipeline system
2.8 Road system
2.9 By Rail
2.10 Sales / marketing operation
2.11 Customer’s services
2.12 Participant in the oil industry
2.13 The Nigeria National Petroleum Co operation (NNPC)
2.14 Pipeline and product marketing company (PPMC)
2.15 Marketers
2.16 Transporters
2.17 The retailer
2.18 Department of petroleum resource (DPR)
2.19 Department of weight and measure
2.20 Task force one petroleum products
2.21 Summary of related literature.
CHAPTER THREE
3.0 Research methodology
3.1 Research Design
3.2 Area of study
3.3 Population of study
3.4 Population sample technique
3.5 Instrument for data collection
3.6 Validity and reliability of instrument
3.7 Method of data collection
3.8 Method of data analysis
CHAPTER FOUR
4.0 Data presentation and analysis
4.1 Data presentation and analysis
CHAPTER FIVE
5.0 Discussion, summary and conclusion
5.1 Discussion of findings
5.2 Recommendation
5.3 Suggestion for further study
Conclusion
Limitation of the study
Reference
Appendix
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
According to Harold Koontz and Heinz Weichuch in their book “ Management ( ninth edition). They stipulated that management as the process of designing and maintaining an environment in which individuals, working together in groups accomplish efficiently selected aims.
According to Kotler in his book “ The principles of marketing “ a marketing distribution channel is a set of firms and individuals that take title or assist in transferring title to the particular goods and services as it moves from the producers to the consumers.
Petroleum product was first introduce into the Nigeria in 1907 by Mobil. In 1957 crude oil from which petroleum products are refined was found in commercial quantities of Nigeria. Between 1908 and 1973, most of the white product i.e. Gasoline or petrol, Aviation Turbine kerosene ( ATK), Household kerosene (HHK) and Gas oil commonly called Diesel were widely marketed by many multinationals like Shell, Texaco, ESSO, British petroleum etc. In 1965 British petroleum and shell established the first refinery in Nigeria. The 35,000 barrels per day refinery was located at Port Harcourt. During this period, crude oil production and petroleum product sales had became so significant to Nigerian economy in 1971, the federal government decided to actively participate in the oil business. The decree establishing the Nigeria national oil corporation (NNOC) was promulgated. The same year, Nigeria joined the organization of the petroleum exporting countries (OPEC). In 1973 the federal government also introduced the uniform price of petroleum products throughout the nation. The petroleum equalization fund brand was established to manage the fund.
However, between 1974 to 1976, Nigeria began to experience shortage for the first time. A research was made and it was discovered that the problems was that of both supply and distribution. It was also identified that tremendous growth had taken place in demand of all petroleum products. It was also identified that the cheapest and most efficient way of transporting large volume products i.e. liquids is by pipeline. Therefore government mandated the NNOC to commence the construction of a network of pipeline and two (2) refineries, one at Warri and one at Kaduna to ensure adequate supply of products throughout the nation. By 1978 after commissing of Warri refinery and the completion of the southern pipelines. The Nigeria National Petroleum Corporation (NNPC) the successor to NNOC took over the supply and distribution of all petroleum products. By 1980 Kaduna Refinery was commissioned and the Northern products pipelines and depots began to operate. The function of supply and distribution of petroleum products in bulk was performed by various department in NNPC. PPMC Enugu Depot was located at Emene Nike Enugu and commissioned in the year 1979.
STATEMENT OF PROBLEMS
Inspite of the achievements and efforts, the (PPMC) pipeline and products marketing company is constrained by a number of problems. The problems recently encountered are.
Contained encroachment on pipeline right of way.
Logistic problems of LPG distribution
Unscheduled shutdown of the refineries which greatly limits products availability.
Partial computerization, which retards the flow of information
Difficulty experienced in establishing letters of credit offshore purchase of critical spare parts.
Lack of prerequisites number of personnel.
PURPOSE OF THE STUDY
The purpose of the study includes the followings:
To identify problems of continued encroachment of pipeline right of way of PPMC
To examine how PPMC is taken adequate measure to have availability of their products.
To find out the extent partial computerization affects pipelines and products marketing company in Enugu
To ascertain the impact of bureaucratic delays in marketing level of pipeline and product marketing company in Enugu.
To educate management on the need for proper checking procedures by their workers.
RESEARCH QUESTIONS
To what extent does pipeline and product marketing company control the vandalization of pipelines.
To what extent does pipeline and product marketing company ensure the availability of their products?
To what extent does the partial computerization affects pipeline and product marketing company?
To what extent dose the bureaucratic delays in marketing level affect the pipeline and product marketing company?
To what extent does poor condition of our road network affect the distribution of petroleum products.
SIGNIFICANCE OF THE STUDY
The study will serve as a source of revenue to both PPMC and the dicers and also the government.
The study will help to assist the management to provide adequate security to the pipelines.
This will help the management to channel their distribution of the propriety channel.
This will also help the management to inform the government about the problems of vandalization in the state.
This study is significant because the researcher hopes that this will serve as a stepping stone for any future researchers especially those who would wish to
SCOPE OF THE STUDY
The scope of the study, boarder on the management problems of petroleum product on Enugu state with particular reference to pipeline and product marketing company Emene Enugu.
Managing petroleum products involves a complex set of challenges due to the critical role these products play in modern economies and their impact on the environment. Here are some of the key management problems associated with petroleum products:
- Supply and Demand Fluctuations: The demand for petroleum products can fluctuate significantly due to economic conditions, geopolitical factors, and weather events. Managing these fluctuations, ensuring a stable supply, and preventing shortages or surpluses is a constant challenge.
- Price Volatility: Petroleum product prices are highly volatile and can be influenced by factors such as global oil prices, currency exchange rates, and geopolitical tensions. Managing price risks and ensuring affordable and stable prices for consumers can be difficult.
- Environmental Impact: The production, transportation, and use of petroleum products contribute to air and water pollution, greenhouse gas emissions, and habitat destruction. Managing the environmental impact of petroleum products is a pressing concern, requiring the development and implementation of cleaner technologies and policies.
- Energy Security: Many countries rely heavily on imported petroleum products, making them vulnerable to supply disruptions and price shocks. Ensuring energy security by diversifying energy sources and reducing dependence on petroleum is a major management challenge.
- Infrastructure Maintenance: The infrastructure required for the production, refining, transportation, and distribution of petroleum products is vast and requires continuous maintenance and investment. Aging infrastructure can lead to safety and environmental risks.
- Safety and Accidents: The handling and transportation of petroleum products involve inherent safety risks. Accidents, such as oil spills, explosions, and pipeline leaks, can have catastrophic consequences. Managing these risks and responding effectively to accidents is crucial.
- Regulation and Compliance: Petroleum products are subject to extensive regulations related to safety, environmental protection, and quality standards. Ensuring compliance with these regulations can be complex and costly.
- Market Competition: The petroleum industry is highly competitive, with many players vying for market share. Managing competition, market dynamics, and staying profitable can be challenging.
- Technological Advancements: Advances in technology, such as electric vehicles and renewable energy sources, are changing the energy landscape. Managing the transition away from petroleum-based products while adapting to new technologies is a significant management challenge.
- Geopolitical Instability: The petroleum industry is often influenced by geopolitical events and conflicts in oil-producing regions. Managing the impact of these events on supply and prices requires strategic planning and risk management.
- Consumer Behavior: Changing consumer preferences for more fuel-efficient vehicles and renewable energy sources can affect the demand for petroleum products. Managing these shifts in consumer behavior is important for the industry’s sustainability.
- Sustainability and ESG (Environmental, Social, and Governance) Factors: Increasingly, investors and consumers are scrutinizing companies’ environmental and social practices. Managing sustainability and ESG concerns is becoming integral to the petroleum industry’s reputation and long-term viability.
To address these management problems, the petroleum industry, governments, and stakeholders need to collaborate on policy development, investment in alternative energy sources, research and development of cleaner technologies, and efforts to reduce the environmental and social impact of petroleum products. Transitioning toward a more sustainable and resilient energy system is essential for the long-term management of petroleum products.