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A Study Of The Nigerian Petroleum Retail Market
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Petroleum products are marketed by indigenous and multinational oil
companies like Total Fina Elf, Exxon Mobil, Agip National Oil, African
Petroleum, Oandoetc. Notwithstanding government best efforts at
improving petroleum products distribution and retail marketing,
challenges of insufficient and irregular product distribution among
others still besiege petroleum product marketing in the country with the
situation getting worse with the recent premium motor spirit (PMS)
subsidy removal.
This gave rise to influx of independent marketers
into the scene as a way to proffer solutions to the numerous challenges
and help stem the tide of inadequate petroleum products availability,
distribution and marketing in the country. Independent marketers were
given rights to play their part in the sector so as to bridge the gap
created by distribution logistics and improve standard of living of
Nigerians, this was a welcome development because products distribution
in the country had been epileptic and unreliable until the independent
marketers’ appearance on the scene.
Shortage of petroleum products
experienced in the country in the early 70s was attributable to paucity
of distribution network. The government of the day responded to these
problems in two ways:
Encouraged well meaning citizens to invest in
petroleum products marketing business and build more depots to bridge
gaps created by transportation deficit,
Promulgated laws and
empowered various security agencies to tackle and control oil theft and
pipeline vandalization with the setting up of various task forces to
make sure petroleum products reach designated location without being
hijacked or diverted.
This research work is concerned mainly with
retail marketing of specific petroleum products such as diesel,
kerosene, premium motor spirit, gasoline and domestic gascommonly used
in domestic and socio-economic settings more than any other product of
petroleum (crude oil).
1.2 STATEMENT OF THE PROBLEM
Participatory
and regulatory rates of government to stabilize marketing of petroleum
products have yielded good results but its resultant effects to equate
demand with supply of these products have been unsuccessful with pattern
of distribution constantly in the forefront of continuous discourse and
debate, since diesel, kerosene, gasoline are described as one of the
bedrocks of the Nigerian economy.
Challenges however still exist in product distribution and marketing in the nation with cases such as;
Inaccessible
depot location: many towns and villages find it difficult to get supply
of petroleum products due to distance between supply source and their
location creating a false sense of unavailability of products in form of
an acute shortage.
Despite best of efforts made to avoid problems,
numerous challenges still plaque product distribution and marketing such
as transportation difficulties in moving products safely and quickly to
point of need occasioned by deplorable road conditions and lack of
railway or cargo movement systems, unending electricity failures, lack
of adequate storage facility with very low and poor refining capacity of
refineries,finance inadequacy and improper funding, poor distribution
channels etc. Recently, these challenges became more apparent as
occasioned by the surge in crime wave in the country in form of oil
theft and pipeline vandalism, militancy in the oil producing states with
massive destruction of existing infrastructure, inflation rates in the
struggling economy, incessant strike action by petroleum sector workers;
paucity of adequate equipments occasioned by lack of maintenance
cultureetc.
Becauseof excessive usage and increased demand for
petroleum products during festive periods, demand exceeds supply leading
to acute shortage and scarcity with some retailers cashing in on the
opportunity to make more cash by hiking fuel prices, hoarding of
products etc. which leads to long queues at filling stations across the
nation.
Various studies conducted have shed light on the way in which
these challenges affect the retail marketing and distribution of
petroleum products but no specific study has been carried out on retail
marketing of petroleum products commonly used such as kerosene, gasoline
and diesel. This study is therefore focused on identifying challenges
of retail marketing of the petroleum products under reference with the
aim of proffering possible solutions.
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