Management Of Petroleum Product Security In Nigeria

Project and Seminar material for Public Administration

Project and Seminar material for Public Administration


The areas covered in this research work are:

  1. Brief history of petroleum product in Nigeria
  2. Scarcity of petroleum products in Nigeria
  3. Causes of scarcity and strategies for managing it
  4. Implication of scarcity on the Nigeria economy
  5. Government policies and strategies for managing products scarcity.

The main objectives of this research are::

  1. To ascertain the management strategies for proper implementation of economic decision to alleviate the suffering of the people with regard to product scarcity.
  2. How problem associated with the variable can be mounted
  3. To proffer other suggestions that can help bring sanity in the management of petroleum products in Nigeria
  4. Review collections as an indept recovery scheme as they affect government polices.

Chapter One


1.1 Background Of The Study

The study of petroleum which is basically a mixture of crude oil and gas is attracting story theory has it that several years ago plants and animal died and their remain become buried deep beneath the earth under many tick layer of sedimentary rocks such as limestone etc. through several physical and chemical changes these organic remains formed petroleum.

Petroleum is found on land and in marine areas. The search for petroleum is an expensive and complex exercise which begins with surveys involving geological mapping rock sampling and analysis the most prominent method used in this survey is earthquakes shooting in which explosives are discharged into the ground.

They were analyzed and recorded as raw seismic data this data is processed and interpreted with the and of computer to show areas of profitable oil and goes accusation such area are then selected for further investigation through driving. When oil is discovered in commercial quantities through driving the oil is sent to station were water and gas are separated and oil is piped to refineries where it will be converted into product such as premium motor sprits (PMS) automotive gas oil (AGO) dual purpose kerosene (DPK) and other fuel oils however this study this centered on PMS AGO and DPK technically known as white products.

It is based on the above historical ground that in 1939 Shelt D Arcy petroleum development company began the search for crude oil in Nigeria.

Scheazi (1969:16) s aid that after the interruption caused by the 2nd world war from 1941-1946, these followed an intensification of the undertaking through geological ground investigation followed by appraisal based on aerial geological photography. The evidence of oil accumulation can only be obtained by or through driving operation.
In the period from list to July 1966 which was the beginning of driving activity about 627 wells were drilled. These well were concentrated in a territory south of a line drawn through Benin city Owerri and Calabar all located in the tropical rain forest and in mangrove swamps vegetation zones. Form 1959-1956 a total of 18 well were drilled (Schazi 1969:14).

All drillings in the north and east parts of eastern Nigeria which were wells drilled in the southern part of eastern region especially in Olobrir and Afan found in the Miocene deposits very promising crude oil accumulations at a dept from 9,000 to 11,000 feet form 1957-1959,shell Bp Spurured on by the discovery of crude oil in Olobiri and Afam increased the number of its drillings there are then clear concentration of drillings activity in south eastern Nigeria.

The increase drillings activity was as a result of the discovery of highly productive friends in Bornu Ebubu Imo River Korokoro drilling intensity was concentrated around port-Harcourt and Ugheli and since 1964 in some of the off shore areas.

Mobile oil bank its first exploration wells in 1959 Tennessee in 1962 America Overseas and Gulf oil in 1963 SAFRAP and Agip in 1964 especially note worth among these is gulf oil for whom 44 of 57 wells showed oil deposits Schatzi (1969:22) on the order hand within African Nigeria is after Libya and Algeria the third most important producing country he share of Africa crude oil production amounted to over 15% in 1966.

Further Nigeria position internationally when it comes to production of crude oil will improve with an annual production of 55 millions tons it might be among the ten most important crude oil producers of the world commercial crude oil production began in Nigeria in December 1957. the production volume increased to 6.6 million barrels in 1960161.

This relatively small rise in production is due primary to limited transport capacity. The availability of crude oil in port of Bonny in April 1961 as well as the expansion of the pipeline net caused an immediate rise in crude oil production in 1961162 to more than 2.8million tones.

Since then crude oil production by drilling activity and expansion of transport capacity has increased continually after the discovery of cried oil in commercial qualities in Olobiri now River state in 1956 Nigeria psychological and social profile changed. By 1970 oil accounted for more than 85% of total earnings since then that percentage has only changed upwards by a few pints.

With such impressive earning Nigeria was involved in prestige project news watch October 24 1994:8) this was the period of oil boom in Nigeria oil and money was so surplus that one former head of state was quoted as saying that “the problem Nigeria has was not money but how to spend they money” the came the period of oil doom from the second half of the seventies till date.

However following the cessation of hostilities in the Nigeria civil war in 1970 economic activities through the federation escalated and the demand for petroleum products was so high that by 1974/75 severe shortage of products became the order of the day (Akpieyi 1987:3)

The result of these shortage or scrambling at services station shortage posed obvious threat to the economic foundation of the country sequel to the problem effort has been made to reform restructures and rehabilitees the refineries by the federal government to cut down the scarcity. This normality in the supply of fuel and other related resources continued till around late 1998 and early 1999 when another maintenance was made to the refineries and despots.

1.2 Statement Of Problem

In teal life no problem present itself as problem but at first the element of problem at first sight is but symptoms of what to come.

The problem created by petroleum products scarcity in the country is so much that it has threatened the socio- political and economic foundation of the country.

Management strategies for proper implementation of these economic decision to alleviate the suffering of the people with regards to products scarcity is one the reasons that spurs the research into this study one of the intents of the research is to fashion out strategies for managing scarcity of petroleum products without improving ay social or economic hardship to the people.

1.3 Objective Of The Study

  1. To assess how government polices affect the strategies to managing petroleum products scarcity in Nigeria using Enugu as a case study
  2. To ascertain the impact of security agents in the distribution of these petroleum
  3. To assess the performance and impact of oil marketing companies as it affects the bridging of white products
  4. Finally to proffer suggestion that can help bring security in the management of petroleum in Nigeria

1.4 Research Questions

  1. Is scarcity of petroleum products caused by the drying up of wells thus leasing to a reduction in the production capacity
  2. Does scarcity of petroleum products cause in told hardship to the generating Nigeria
  3. Do petroleum product marketers induce scarcity in order to cash in on the situation?
  4. Has lack of maintenances of Nigeria oil refineries with reference to turn ground maintenance been instrument to the recurring problem of petroleum products scarcity
  5. Has management inefficiency in the running of Nigeria oil refineries been a major contributing factor in the recurring scarcity of petroleum products
  6. Does lack of co-operation among the various agencies in charge of petroleum products especially NNPC and PPMC in fashioning and implementing appropriate petroleum products marketing strategies lead to scarcity of these products.

1.5 Hypothesis

  1. Ho: Represented the “null” hypothesis while
    Hi: Represented the alternative hypothesis
  2. Hi: Security agents has impacts in the distribution of petroleum products
    Ho: Security agents has no impact in the distribution of petroleum products
  3. Ho2: Government agencies/polices does not strongly affect the strategies to managing products scarcity
    H1: Government policies strongly affect the strategies to managing petroleum products scarcity
  4. Ho3: The performance of oil marketing companies affect the bridging of while products

1.6 The Scope (Delimitations) Of The Study

The scope of this work span form 1937 when the search for crude oil started in Nigeria by Shell D Archy to present date.

The researcher equally limited the scope of the study on petroleum product scarcity to the what is technically called white product premium motor spirits (PMS) Dual purpose Kerosene (DPK) and automotive gas oil (AGO)which are the major problem of the common man.

Again for easy coverage and acceptability the major oil marketing companies have been oil marketing companies have been selected for purpose of this study and findings will be taken as a proper representation of other oil companies in strategies for managing scarcity of petroleum products in the country and in Enugu metropolis

1.7 Significance Of The Study

Firstly this research will go along way towards finding solution to the epileptic supply of petroleum products in Enugu metropolis by offering strategies and management styles necessary for a steady supply of product with a minimum interruption.

This research also will be a sources of inspiration and stepping stone for other who will venture into similar search.

The oil industries have immense potentials and it plays vital role in the nation’s economy. A contributes significantly in raw material development especially in petro-chemicals industries.

These areas holds the key to the nations economy and perhaps the pictures of it all.

There are projects which under normal situation would grow and diversified if managed properly. The state is spending a lot of fund and hard currency in purchasing both foreign refined products and qualified personnel to supplement the local resources. A well managed oil industry business will always maximize profits which will enable it to go into research and development.

Through this way it will eventually start sourcing its raw materials locally thereby saving the foreign exchange which would have been used for that purpose.

As an academic study it will be of great value to those involved in fashioning out strategies for management of petroleum products scarcity in the society.

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