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AN EVALUATION OF DISTRIBUTION CHANNEL IN THE
LOGISTICS MANAGEMENT OF PETROLEUM PRODUCTS
ABSTRACT
This research was motivated to appraise the
evaluation of distribution channel in the logistics management of petroleum
product using Oando plc as the case study. There was a problem of the
tendency of distribution of those petroleum products to the Northern &
Southern which effect to a scarcity of the product in other areas of the
country. On the contrary to the problems of this research work, an
objective came to be as to ascertain whether there is an effective and
efficient distribution of petroleum products, all round the country.
In the process of solving and pursuance on the
problems and the objectives, both primary and secondary data were
sourced. The targeted respondents were mainly the managers, staffs and
customers were statistically determined for the purpose of both questionnaires
administration and personal interview. In organizing and presentation of
data collected, tables and percentages were used and various hypothesis were
tested using chi-square. The tests of the hypothesis made the researcher
to concluded that Oando plc cannot improve on the distribution channel in the
logistics management of petroleum product in our country, as the critical value
was greater than the expected value on both tests.
5-99 > 1.2481 & 1.8838 < 5.99
The study reviews some finds which made the
researcher to recommended that government should set some security agencies
that can militate against perpetrator that vandalize the pipeline and other
unscrupulous person (s) that engaged in similar act he believes if carefully
implemented will go a long way to shortening the various problems.
TABLE OF CONTENTS
CHAPTER ONE
INTRODUCTION
1.1 Background
of the study
1.2 Statements
of the problem
1.3 Objectives
of the study
1.4 Significance
of the study
1.5 Research
questions
1.6 Formulation
of hypothesis
1.7 Scope
and limitation of the study
1.8 Definition
of basic terms
CHAPTER TWO
LITERATURE REVIEW
2.1 Definition
of channel system
2.2 Management
of logistics/channel system
2.3 Conflict
in channel management
2.4 Co-operation
by channel participants
2.5 Channels
of distribution in petroleum products
2.6 Factors
affecting petroleum products
2.7 Managing
marketing channels of petroleum products
2.8 The
benefits of using efficient channel
System as a Means of Distributing Petroleum
Products
References
CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
3.1 Research
design
3.2 Area
of study
3.3 Population
of the study and sample size
3.4 Instrument
used
3.5 Validity
of the instrument
3.6 Reliability
of the instrument
3.7 Method
of data collection
3.8 Method
of data analysis
CHAPTER FOUR
PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA.
4.1 Summary
of the results and findings
4.2 Testing
of hypothesis
CHAPTER FIVE
DISCUSSION, CONCLUSION AND RECOMMENDATION
5.1 Discussion
of the result
5.2 Conclusion
5.3 Recommendation,
suggestion for further research bibliography
Appendices
CHAPTER ONE
INTRODUCTION:
This chapter consists of details of the topic under
research. Here the background of the study statement of the problem,
objectives and significance of the study will be revealed along with research
question so as to enable the researcher know what the research work is all
about.
1.1 BACKGROUND
OF THE STUDY
As a result of petroleum products being the major
exporting product among others, of our country. Our country solely
depends on it as the highest percentage revenue on the overall percentage of
the total exportation products or items.
In the 1979s after the civil war, Nigerians have
Agricultural products as the dependent product in both domestic and
international uses. But today due to greater lucrative of this product
all over the world, abandoned the former for the latter.
As the uses is universal, the extractive regions
which are at South east and South west encountered a difficult impact to be
supplied or distribute to various areas of other regions of the country, due to
mainly mismanagement and other opposing factors. The transportation of
this extracting products from the originated area to the refinery was a great
problem in the country, because of its form bulky and channel of distribution.
The government then employed foreign bodies to
refine this product in order to reach to the hook and of the country. The
refinery built and managed by government admitted a foreign firm to have a part
in the refinery for the bases of their services as regards to
importation. Still not adequate as the dealers divert this product to
their own perspective regions where they expect to dispose it in a high value.
At times, this petroleum products i.e. fuel,
kerosene, diesel, bitumen to mention but few do change totally the generic
colour used to it to another unpredicted colour thereby caused a harm to human
body. These dealers were formerly the staffs of one firm and another for
years, left their various perspective offices for the marketing of these
products thereby formed one organization and another to impose the prices on
this products.
The region that is basically not interested in the
use of this product by their majority because of their belief or customs has
low cost and optimal quantities than other regions.
From the facts, it becomes clear that if the left
cream of the nation is to be feasible accordingly, a great percentage or rate
of the standard of living would have been a something if smile to the populace.
HISTORY AND BUSINESS OF THE COMPANY (OANDO)
The company commenced business operations as a
petroleum marketing company in Nigeria in 1956 under the name of “ESSO West
Africa Incorporated” a subsidiary of Exxon Corporation of the United States of
America. In 1969, the company was incorporated as ESSO Standard Nigeria
Limited, and in 1976, the Nigerian Government acquired all of ESSO’ s
shareholding interest, thereby fully indigemising the company whose name was
subsequently changed to Unipetrol Nigeria Limited. It became a public limited
liability company in 1991, when the federal government divested 60% of its
shareholding to the general public, and was quoted on the Nigerian Stock
Exchange in February 1992. In 2000, the Federal Government divested its
remaining 40% shareholding in the company, 30% of which was acquired by ocean
and oil investment limited whilst the balance of 10% was taking by the Nigerian
Public.
In 2002, the company acquired Agip Petroli
International BV’s 60% shareholding in Agip Nigeria Plc (Agip) and subsequently
merged with Agip to become the second largest player in the downstream
petroleum marketing industry. In December 2003, the company announced the
launch of “Oando PLC” its new corporate identity to signify the creation of a
proudly West Africa brand. The new corporate identify and branding
exercise portrays the values and brand essence of the company service
excellence, performance – driven, dynamic and progressive, consistent quality
experience and proudly West African.
1.2 STATEMENT
OF THE PROBLEM
Petroleum products have a numerous problems on
logistics management on its distribution, it is the only and major exporting
product of our country, which is disposed in a high rate to another
country thereby expect the citizening to do the same the tendency of
distribution channel to the Northern and Southern regions of the country is
much more sufficient than other regions, which causes scarcity of the product
in these areas. Some quantities of these products are being diversified
to other different stations for a tremendous income, impact on hoarding which
reveals the control is not effective.
Many of the distribution channels are being
vandalized by unscrupulous individuals in the area which stagnantly affects its
distribution and transportation. Moreover, there is weights and measures
on the quantities of this petroleum products making the dealers to have
different prices of disposing this product in their various areas.
Finally, the Boards that deals on the marketing of this petroleum products
(NUPENG, PENGASIN, etc) do impose some requisitions from the federal government
which may not come forth, affect its distributions.
1.3 OBJECTIVES
OF THE STUDY
The objectives of this study are;
1. To
ascertain whether there is an effective and efficient distribution of petroleum
products, all round the country.
2. To
determine if sufficient production of petroleum products are sold at a cheaper
rate and curls the trend of scarcity on the country as the sixth oil producing
ration of the world, and the first in Africa.
3. To
find out whether the various refineries of the country are put in shape thereby
limiting the services of other countries in refining our own petroleum products
in terms of trade.
4. To
ascertain whether what we produce is satisfying the citizen
5. To
identify a post – mortem to the present situation, and that of the future, and
many years to come..
6. To
determine how the supervision of distribution of petroleum product is done to
curls fore outbreak, and the cost of resuscitating the damages.
7. Moreover,
to identify the availability of petroleum product to minimize traffic hold –
ups, queuing for a long time, unavailable means of transportation, wastage of
hire in transporting one self, and its high cost.
1.3 SIGNIFICANCE
OF THE STUDY
It requires a little reasoning to discover that
this research will be of immense benefits to the public government, Oando and
its numerous branches, and as well other petroleum dealers. It will
enable them to discover the disequilibrium on the effective. Logistics
management on various petroleum dealers in the country and outside. It
will enable them also to monitor the petroleum marketers on their channel of
distribution in order to reach the purposely masses.
The Niger – Delta populace will benefit through the
establishment of various facilities in their area. The public will
discover the information of the petroleum dealers as regards to the rate of its
consumption and the standard of living in the country. Furthermore, this
research will be immense benefits to Oando on improving their management
functions or activities in all ramifications. It will also help in the
offer for future benefits.
Finally, many forming will benefit for easy
mobility of their business activities and operation especially on those that
have petroleum dump in their environment (UNEC, IMT etc).
1.5 RESEARCH
QUESTIONS
1. Do
the faults in our refineries affect the distribution of petroleum products?
2. Can
the attitudes of these petroleum Boards circument the government intervention
on the problems?
3. What
can be the effect of mismanagement on the logistics distribution of petroleum
product in our country?
4. Can
it affect Oando on their struggling to be the petroleum leaver in the country
and Africa?
5. Can
the discriminations in the political affairs of our country affects Oando in
their business activities?
6. Can
we boast of sixty percentage (60%) satisfaction of these petroleum products by
the average populace?
7. Can
we ensure a constant petroleum products in all regions of our country i.e.
Improve in scarcities?
8. Do
you think that Bakassi – penusula area will be benefited from this distribution
of petroleum products?
9. What
measure can we take against the perpetrators that engaged in black marketing,
thus making a high percentage gain?
10. What
can we do to have a stable price of petroleum products in our country?
1.6 HYPOTHESIS
FORMULATION
Hypothesis as we all know is an intelligent guess,
a tentative statement, and a conjectural statement of the relationship between
two or more variable. Therefore, the hypothesis of this study was stated
like these;
Ho: Oando Plc cannot improve on the
distribution channel in the logistics management of petroleum product in our
country. Null Hypothesis.
H1: Oando Plc can improve on the distribution
channel in the logistics management of petroleum product in our country.
Alternative Hypothesis.
Ho: The Boards of Petroleum dealers cannot
stabilize the price, and rate of petroleum products in Nigeria. Null
Hypothesis.
H1: The Boards of Petroleum dealers can
stabilize the price, and rate of petroleum products in Nigeria.
Alternative Hypothesis.
1.7 DEFINITION
OF BASIC TERMS
LOGISTICS: Supply, Distribution, and Replacement of materials.
MANAGEMENT: The process of applying managerial functions for
effective operation.
POST-MORTEM: Review of the past occurrences or events.
CIRCUMVENT: present a plan from being carried out.
BITUMEN: Black, sticky substance (from petroleum) used for making road
e.t.c.
LUCRATURE: profitable; bring in money.
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