AN EVALUATION OF THE DISTRIBUTION STRATEGIES FOR THE MARKETING OF PETROLEUM
ABSTRACT
This research was motivated to apprise the evaluation of distribution strategies adopted by Oando Plc for the marketing of petroleum product. There was a problem of the tendency of distribution of those petroleum product to the Northern and 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.
Both primary and secondary data were sourced in the process of resolving and pursuing the issues and goals.
For the purposes of administering questionnaires and conducting personal interviews, the intended respondents were primarily managers, employees, and customers. Tables and percentages were utilized to organize and illustrate the data, and chi-square was used to test several hypotheses. Due to the critical value exceeding the predicted value on both tests (5.99>1.2481 and 1.8838 5.99), the researcher came to the conclusion that Oando Plc cannot improve the distribution strategies for the marketing of petroleum products in our nation.
According to the researcher, the study’s findings led to his recommendation that the government establish security agencies to help fight pipeline vandals and other dishonest people who participate in similar behavior will go a long way to reducing the different problems if appropriately implemented.
CHAPTER ONE
INTRODUCTION
Details about the subject of the research are included in this chapter. To help the researcher understand what the research is about, the study’s background, problem statement, aims, and significance are all disclosed here along with the research question.
1.1 BACKGROUND OF THE STUDY
because among other things, petroleum goods make up the majority of our nation’s exports. As the largest percentage of the total exporting of goods or products, it is the only source of income for our nation.
Following the civil war, agricultural goods were used both domestically and internationally by Nigerians in the 1979s. However, due to this product’s increased global viability, the former has been replaced by the latter.
Due to mismanagement and other negative conditions, the South East and South West extractive regions found it difficult to provide or transport their products to different parts of other regions of the country despite the fact that their applications are universal.
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 them 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 dealer divert this product to their own perspective regions where they expect to dispose it in a high value.
At times, this petroleum products ie 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 of smile to the populace.
OANDO PROFILE
Oando’s earliest roots can be traced to the formation of ESSO Africa in 1956. ESSO Africa was a petroleum marketing company, a subsidiary of the Exxon Corporation on U.S.A. In 1976, the Nigerian government purchased a controlling stake in the company and rebranded the company as Unipetrol Nigeria. On 1st March 1991, Unipetrol became a Public Limited Company, later on in the same year, the Nigerian government sold 60% equity to the Nigerian Public in an initial public offering. By February 1992, Unipetrol was listed on the Nigerian Stock Exchange.
In 1999, Unipetrol acquired a 40% stake in Gaslink Nigeria Limited, a gas utility company. The acquisition was motivated by a desire to utilize its excusive gas sale and purchase agreement with the Nigerian gas company. In 2001, the company increased its stake to 51 percent.
In 2000, ocean and oil, a private investment company led by Nigerian entrepreneurs, Adewale Tinulu and Omamofe Boyo acquired a 30% controlling interest in Unipetrol Plc. In 2001, Ocean and Oil increased its stake in Unipetrol to 42% via on irredeemable convertible loan stock issue.
In 2002, Ocean and Oil led Unipetrol’s bid for a 60% stake of Agip Nigeria Plc, a rival petroleum marketing firm, owned by Agip petroli BV, an Italian-based oil company. The merged company was named Oando Plc in 2003, making the company the largest downstream petroleum marketing company in Nigeria.
In 2005, Oando Energy services was incorporated as an integrated oilfiled services company to achieve the groups objectives in the upstream services industry. In 2007, Oando Energy services acquired two oil drilling rigs in Nigeria’s Niger Delta. In 2008, the company emerged Nigeria’s first indigenous oil company with interest in producing deep water assets through the acquisition of equity in two oil blocs. By 2009, the company had acquired 5 swamps rigs and in 2010, the company launched its first independent power plant for the Lagos water corporation. The project involved the construction of a 12.5mul power plant to provide uninterrupted power supply to the Lagos water corporation.
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 State 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 indigenizing the company whose name was subsequently changed to unipetrol Nigeria limited. It become 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 N0% 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 order to become the second-largest participant in the downstream petroleum marketing sector, the business purchased Agip Nigeria Plc (Agip60% )’s stake from Agip Petroli International BV in 2002. Agip and the company then merged. To represent the construction of a distinctly West African brand, the company announced the launch of “Oando Plc” as its new corporate identity in December 2003. The company’s service excellence, performance-driven, dynamic and progressive, consistent quality experience, and proudly West African identity are all portrayed in the new corporate identity and branding exercise.
1.2 STATEMENT OF THE PROBLEM
As the single and main export of our nation that is disposed of at a high rate to another country, petroleum products face several marketing and distribution challenges. As a result, we expect our citizens to follow suit. The Northern and Southern sections of the country tend to receive significantly more distribution than the other regions, which makes the product scarce in these places. For a significant financial gain, some quantities of these products are being distributed to various other stations, which has an impact on hoarding and shows that the control is ineffective.
Untrustworthy people in the neighborhood are breaking into many distribution channels, which negatively impacts how the product is transported and distributed. Also, because there are weights and measurements associated with the quantities of these petroleum products, the dealers charge varying amounts to dispose of them in their various regions. Finally, the Boards responsible for the marketing of these petroleum products (NUPENG, PENGASIN, etc.) do impose some requirements from the federal government that may not materialize and may have an impact on their distribution.
1.3 OBJECTIVES OF THE STUDY
These are the study’s goals:
1. To determine if petroleum products are distributed effectively and efficiently across the nation.
2. To assess whether the nation, which is the sixth oil-producing country in the world and the first in Africa, produces enough petroleum products to curtail prices and the trend of scarcity.
3. To determine if the country’s numerous refineries have been upgraded, limiting the ability of other nations to refine our own petroleum products through trade.
4. To determine whether the public is satisfied with our output.
5. To determine a post-mortem for the current situation as well as that of the future and many years from now.
6. To ascertain the cost of repairing the damages and how petroleum product distribution is supervised to curtail outbreaks.
7. In addition, it is important to determine the availability of petroleum products to reduce traffic jams, lengthy lines, the lack of available transit options, the expense of hiring a driver, and the time and money wasted.
1.4 SIGNIFICANCE OF THE STUDY
It doesn’t take much logic to realize that the public government, Oando and all of its various departments, and other petroleum dealers will all greatly benefit from this research. They will be able to identify the effective imbalance thanks to it. advertising for numerous foreign and domestic fuel merchants. They will be able to keep an eye on petroleum marketers’ channels of distribution in order to reach the targeted population.
The construction of numerous amenities in the Niger-Delta will be advantageous to the local population. The general public will learn about the petroleum dealers’ statistics regarding the nation’s consumption rate and standard of living. Also, Onado will greatly benefit from this research in terms of enhancing their management functions or actions in all their forms. Additionally, it will support the promise of future advantages.
Finally, many businesses, especially those with petroleum waste in their environment, will profit from easy mobility of their corporate operations (UNEC, IMT etc).
1.5 RESEARCH QUESTIONS
1. Do our refineries’ problems have an impact on how petroleum products are distributed?
2. Are these petroleum Boards’ views capable of avoiding government action on the issue?
3. What potential consequences might there be.
4. Will it have an impact on Oando’s battle to become Africa’s leading petroleum exporter?
5. Can Oando’s commercial operations be impacted by the prejudice in our nation’s political affairs?
6. Can we claim that the ordinary person is sixty percent (60%) satisfied with these petroleum products?
7. Is it possible to maintain a steady supply of petroleum products across the entire nation, hence reducing shortages?
8. Do you believe that the Bakaassi-Penusla region will profit from this petroleum product distribution?
9. What action should be taken against the perpetrators that engaged in black marketing, this making a high percentage gain?
1.5 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 for the marketing of petroleum product in our country. Null hypothesis.
H1: Oando Plc can improve on the distribution strategy for the marketing 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.
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