PETROLEUM DISTRIBUTION

789 Users found this project useful

PETROLEUM DISTRIBUTION IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1    BACKGROUND TO THE STUDY

It is evident that whenever more than person is involved in an activity or organization, there is bound to be friction. Since it has been established that occurrence of most rational activities involve people there is therefore need fro guidance in order to achieve the aims, goals and objectives. Fuel shortage and their attendant distribution problems started in the later part of 1993 and were attributed to labour and political crisis of that year. Black market for petrol has come the order of the day. The market which thieves in the suburbs and the surrounding states does not require filling stations or fuel pumps. Petrol was sold in any type of container and as a free market prices. Against  this background, the businessmen seeing that it is a brisk way of sharing money, no longer had to wait for the NNPC Depot to negotiate for supply of fuel and to bribe way through for supply. This is why many Nigerian experts in petroleum scarcity is the result of the crushing problem at the NNPC. The NNPC, inside sources confirm is not disposed towards refurbishing the refineries. Another reason why local demand for petrol is easily dashed is the high incidence of smuggling of the products across the borders. Most NNPC officials agreed that Nigeria looses up to 600,000 liters of petrol through smuggling.

The curb smuggling, the pipeline and product marketing company, PPMC a subsidiary of the NNPC declare the volume of allocations to every state ahead of supply. The measure was to enable the government to monitor distribution of petrol in their states. At the end of the day, the governors administrator and the marketers will account for any diversion of petrol in their states. Indeed NNPC;s investigations has revealed that up to 30 percent of all fuel meant for local consumption is lost through smuggling. Today various state government including Enugu State have set up task     forces at stem this destructive practice but even the soldier do not seem able to arrest the situation since whole tanker loads of fuel still disappear. As government seeks to correct the smuggling of petrol, the smugglers are ingenious in discovering new ways of circumventing the law. For instance, petrol is sold to these smugglers at odd times and the jerry cans of petrol are stacked in bags and covered with cloths or garri to evade task force officials.

The  story of problem of petroleum distribution cannot be complete mentioning the industrial action (strike) embarked by National Union of Petroleum and National Gas Workers, NUPENG and the Petroleum and Natural Gas Senior Staff Association of Nigerian, PENGASSON while led to their proscriptions. This strike action by NUPENG and PENGASSON served as a stepping stone for illegal dealer to rise to the top and scarcity of petroleum products nationwide. The network of the trade is so well coordinated and vast failed. It was generally alleged that military helped many tankers loaded with the commodity often tries to be divested to other places other than the official destinations. The military personnel exhibit corrupt kills selling to their officers and collecting money from people. The military personnels involvement is also established, down the trade chain as most of them get their consignment in drums regularly from filling stations who sell at night father than during the day. The activities of black marketers have remotely affected the suppliers of fuel to many filling station in Enugu and across the country, long gueues are common right with motorists leaving their vehicles on queue for days an end. In view of these chronic problems and solution to that, out interest to the study in emanates.

1.2     STATEMENT OF THE PROBLEM

1. Diversion of petroleum product by the tankers drivers and smugglers.

2. The illegal fuel peddlers and fuel hoarders

3. The industrial action embarked by National union of petroleum and Natural Gas Workers peak of the business.

An army sergeant of Enugu was overheard saying that he makes an average profit of N3000 daily from illegal sales of petrol. He gets fuel from filling stations and other privileged sources of official rates an hands over to his boys to sell at exorbitant black market price. The army sergeant wished that this crisis persists because his family has been able in recent times occasioned by this windfall to meet most of its long outstanding obligations. He thanks his God for his mercies because for over his 25 years in service, he had nothing to show for them. Now, thanks to fuel crisis, he has bought household items including coloured television, video recorder, fan, refrigerator etc in few weeks. This depicts that the trafficking of petroleum products has assumed the primary position of the most lucrative business in Nigerian where instant profits abound, many leave their means of livelihood to joint this illicit trade. Petrol has become liquid gold that yield dividend in leaps similar to drug  trafficking. Most parts of Enugu have been dotted with spots (black-markets) where the business is daily transacted in broad daylight without fear of arrest by security operatives. The black markets have seized the opportunity offered by the industrial actions embarked upon then by the National Union of petroleum and Natural Gas Workers and the petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSON) which occasioned.