OPTIMISATION OF PETROLEUM DISTRIBUTION SYSTEM

INTRODUCTION

Petroleum industry occupy’s strategic and importance in the Nigeria economy accounting for as high as 7890 of gross domestic product and up to go-go of the country total annual revenue and foreign exchange earnings the petroleum industry can be classified by types of actors or by sector. The actors in the Nigerian industry consist of both private and public organization. The public actors are the government agents and functionaries such as the Nigerian national petroleum cooperation (NNPC) and its subsidiaries, the department of petroleum (DPR), the petroleum products pricing regulatory authority among others. The private segment consists of both indigenous and foreign actors.

The indigenous sector consists of private independent markers. As far barn as 1978 the concept of independent petroleum product marketing was introduce with a view to bring indigenous independent marketer to that sector of the industry. EROMOSELE (1997) observe that after almost half a century of oil exploration in Nigeria, the oil industry is earning  a nature status in comparation to other industries in the country such that significant progress has been made in terms of oil exploration and sell of crude oil abroad. Unfortunately the domestic management of petroleum resources is fraught with a number of problems. There is occasional product shortage, inefficient product destitution containing home price of petrol. Therefore this research aims at investigating of problem distribution system using ICT.

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

Distribution refers to moving and storing a product from the supplier doorstep to the customer doorstep (S. Chopra 2002). Each organization has set their goals at different phases according to their own mission and vision. For instance, achieving the higher responsiveness with minimum lead time becomes the target of one party whereas others want to minimize their logistics cost.

          Distribution system of petroleum product in Nigeria is found to be inefficient and insignificant. In any establish organization decision about how to distribute product and services to ultimate consumer are among the most important decision confronting management because distribution decision must be made in terms of various and sometimes divergent  objectives and strategies. Petroleum product distribution is therefore concern with the movement of refined petroleum from the refinery to the final consumer across various location of delivery in the country. In the Nigeria situation pipelines and product marketing company (PPMC) responsible for the whole lace supply, distribution and marketing of petroleum product in Nigeria. Petroleum distribution is a complex task that involves transporting and storing across the country. This process is done by various players including the major marketer that transport product from the refinery to their banded stations, independent distributors that transport product from depots to their services station. According to WOTHINGHAM (2004) the distribution segment of the petroleum values change holds the most promised for domestic initiative. The effectiveness of the distribution is therefore significant for the economic development process. Hence he need for a research of this nature which is aimed at investigating the optimization of problem distribution system using ICT.

1.2     STATEMENT OF THE PROBLEM

          The Petroleum industry occupy a strategic important in the Nigeria economic accounting for as high as 7890 of GOP and 909 of the country total annual revenue and foreign exchange earnings. However the distribution of petroleum product to the wider market is besiege with gross inefficiency and ineffectiveness has been witness in the occasional shortage of petroleum product and the contending pump of petroleum. In view of the significant of the sector, it is necessary that measure be adopted to optimize the distribution of petroleum product. Therefore the problem confronting this research is to investigate the optimization of petroleum distribution using ICT.