University of Nigeria Research Publications

OKAFOR, Fidelis O.

Aut

hor

PG/M.BA/98/45460

Title

The 1997/1998 Fuel Scarcity in Nigeria, Causes and Cures

Facu

lty

Business Administration

D

epar

tmen

t

Marketing

Dat

e

June, 2000

Sign

atur

e

THE 199711998 FUEL SCARCITY IN NIGERIA

CAUSES AND CURES

OKAFOR FIDELIS .O. PG/MBA/98/45460

DEPARTMENT OF MARKETING UNIVERSITY OF NIGERIA

ENUGU CAMPUS

JUNE, 2000.

UNIVERSITY OF NIGERIA ENUGU CAMPUS

DEPARTMENT OF MARKETING THE 199711998 FUEL SCARCITY IN NIGERIA

CAUSES AND CURES

OKAFOR FIDELIS .O. PG/MBA/98/45460

THIS PROJECT IS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF MASTER OF BUSINESS

ADMINISTRATION (MBA) DEGREE IN MARKETING.

TITLE PAGE

199711998 FUEL SCARCITY IN NIGERIA CAUSES AND CURES

CERTIFICATION UNIVERSITY OF NIGERIA

ENUGU CAMPUS

DEPARTMENT OF MARKETING

I HEREBY CERTIFY THAT THIS PROJECT WORK.

OKAFOR FIDELIS .O. PGlMBN98145460

TITLED

THE 199711998 FUEL SCARCITY IN NIGERIA CAUSES AND CURES

HAS BEEN

SUPERVISED AND FOUND WORTHY OF ACCEPTANCE IN PARTIAL FULFILMENT FOR THE AWARD OF BUSINESS ADMINISTTION (MBA) DEGREE IN MARKETING.

D.A. NNOLIM (MRS) HOD MARKETING sUPERV170R / .................................... DATE

$ly- 1 0 1 ,'q ............a,.... L...................

DATE

DEDICATION

This research work is dedicated to my lovely wife

Adaora and little daughter Chinaza for their steadfast love

throughout the trying moment.

ACKNOWLEDGEMENT

It is with deep sense of appreciation that I acknowledge the contributions of the

following for their unrelentless moral, financial and spiritual assistance during my

programme. Despite their tight schedule they still want to be associated and be part of a

worthy break-through.

To God be the glory for adding yet another feather to the already existing ones. The

good health he giveth and the strength knew no bounds in achieving this fit.

My profound gratitude goes to my parent Chief & Mrs. G.A. Okafor (Omemma) and

the entire Okafor family for being part of the success and Mrs. E.M.A. Oraka my mother in

law. Also need to be mentioned are the following Dr. & Mrs. A.O. Onuegbu, Senaotr Fidelis

Okoro, Mr. Okey Nnolum, Chief (Dr.) & Lolo IG. I. Nubia, Engr. Usman Mohammed,

Chukwuma Oraka, my brother in law; Mrs. & Mrs. P.O. Agu, Rev. Francis Okoli, my cousin,

Mr. Adiele of PPMC sales office, Chief & Mrs. Chima Agu, of CINTA Investment Ltd. and

the last but not the least Engr. & Mrs. Joe Nwekwo, Depot Manager, PPMC Enugu for their

cares and concern.

My thanks will be incomplete without making mention of the following friends Iyk

Agu, Emrnanuel Onyegbule, Vincent Eke, Kalu Agodi, John Uga, Ifeanyi Ezeugwu, Chris

Ene, Dr. & Mrs. Eneh, Agozie Ene, Chisom Okoye, Gideon Emerole, and others numerous to

mention for their support and assistance during the programme.

My unalloyed gratitude goes to my project supervisor Mrs. D.A. Nnolim who despite

her tight schedule as the Dean of the faculty, squizzed out time to direct and encourage me

where and when necessary.

You will always remain a mother to me.

In conclusion, my regards also goes to my able H.O.D. Mr. C.B. Achison and other

lecturers in the department for their contributions. To God be the glory.

Okafor, Fidelis 0.

June, 2000

ABSTRACT

This research work tries to analysed the causes and cures of 199711998 fuel scarcity in

Nigeria.

Information was gathered through both primary and secondary sources. The analysis

and testing were carried out with reliable statistical techniques such as Chi-square null

hypothesis, bar & pie charts for illustrations and simple percentages.

This study was designed to examine the real cause of the 1997-1998 fuel scarcity in

Nigeria and the curse that arrested the situation. Hence this work identified that the

distribution policies of NNPC, non repairs of refineries contributed in no small measure in

the fuel scarcity of the period under study.

Recommendations was made to the Federal Government on how to cure the fuel crisis

both in the short and long run. Short run measures include importation of the product during

crisis period. Removal of bottlenecks imposed on dealers by the depot staff and government

officials. While the long run measures making a legislation should be made and enforced to

guard against sharp practices by marketers etc.

vii

TABLE OF CONTENTS

................................................................................. Title page

......................................................................... Certification page

................................................................................. Dedication

........................................................................ Acknowledgement

.................................................................................... Abstract

......................................................................... Table of Contents

CHAPTER ONE

...................................................................... Introduction

....................................................... Background to the study

........................................................... Statement of problem

. . ........................................................ Objectives of the study

....................................................... Significance of the study

Scope of the study ............................................................... . . . ........................................................ Limttattons of the study

.............................................................. Definition of terms

.............................................................. Research questions

............................................................ Research Hypothesis

CHAPTER TWO

LITERATURE REVIEW

Nigeria National Petroleum Corporation (NNPC) .....................

The Pipeline and products marketing Co . Ltd

. . ................................................ (PPMC) and its objectives

Commercialized Nigeria National Petroleum Corporation .........

Petroleum Product Distribution in Nigeria

......................................................... (General overview)

...................................................... Channel of distribution

Appraising the scarcity of fuel during the period under study ........

....................... International trend in petroleum products pricing

CHAPTER THREE

.................................................. Research Methodology

Research Design ..........................................................

Desk survey ...............................................................

Field survey ...............................................................

.......................................... Instrument for data collection

................................................................ Population

.................................... Sampling and sampling technique

. . ............................................. Sample size determination

3.5 Techniques for data Analysis ....................................... 39

3.6 Test Techniques employed ......................................... 40

CHAPTER FOUR

................ DATA PRESENTATION AND ANALYSIS OF DATA 41

CHAPTER FIVE

SUMMARY. RECOMMENDATION AND CONCLUSION

5.1 Summary of findings ............................................... 71

5.2 Recommendations .................................................. 76

5.3 Conclusions ........................................................ 78

5.4 Suggestions for further research .................................. 79

Bibliography .................................................................. 80

Appendix ..................................................................... 83

Questionnaire .................................................................. 83

CHAPTER ONE

INTRODUCTION:

The oil industry is no doubt the world's largest and leading industry. It's discovery in

any part of the world is a source of happiness to the people of the area in particular and the

nation in general. This is because it is not only a major source of income to the people and

government of the area but it also elevates the economic, political and social status of the

people.

In the world all over, the discovery of oil serves as a resting hope to the world's

leading industrialist. Internationally, it is most likely to be the only industry that concerns

every country of the world, since it has taken over the position of cocoa and palm oil as

Nigeria's export source.

This wonderful source of energy found beneath the earth surface, has contributed a lot

to facilitate business activities and encouraging international trade. The sourcing, drilling and

production takes not only a reasonable amount of money, it also take expertise in technology

of digging far into the earth as in on shore or beneath the earth level as in the off-shore. The

major production areas of petroleum products is in the less developed countries like Nigeria

while its major consumption area is in the highly developed countries of united states of

America and Western Europe. Because of its position in the economy of the nation as the

chief source of energy and as a political weapon, a day hardly passed without being part of

the news item. Unfortunately in Nigeria, scarce of the commodity is always the case. The fear

being entertained from all quarters is whether this spite of scarcity would ever come to an end

and its remote causes

1.1 BACKGROUND TO THE STUDY.

Prior to the post independence era and beyond, Agriculture was the main stay of

Nigeria economy. This was typified with the groundnut pyramid in the north, cocoa in the

west and palm produce in the southeast. The emphases now shifted to petroleum with the

discovery of crude oil deposits in commercial quantities at Olobiri in the Niger Delta area

after several years of search and investment. Export world (1990) vol. No 2 March.

Oil production and export from the Olobiri field commenced in 1955 by shell

Petroleum Corporation in partnership with Nigerian government with the production rate of

five thousand one hundred barrels of crude oil per day. The quantity was doubled the

following years and crude oil export from Nigeria rose to 2.0 million barrels per day in 1999.

Nigeria attained the status of a major oil producer ranking seventh in the world by 1972

presently Nigeria had since grown to become the sixth largest oil producing country in the

world. Fos trade review (1998) IINO 5, October.

However the role of government in the industry has gradually progressed from a

regulatory one to direct involvement in oil exploration and exploitation. Initially, government

interest was only limited to the collection of royalties and other dues from the oil companies

and making rudimentary laws to regulate the activities of the oil industry. This was partly due

to the fact the oil was very insignificant to the economy before the late sixties and relative

lack of trained personnel and expertise.

NAPECTOR NEWS vol. 1 No 1 l(1990)

By 1971, a year after Nigeria's civil war, oil had become very important to the

economy. In a bid to strengthen and establish government control in the industry, the Nigeria

National Oil Corporation (NNOC) was established by decree No. 7 of 1971 as an integrated

oil company and joined the Organization of Petroleum Exporting Countries (OPEC) as the

1 l th member country. The Nigeria National Oil Corporation W O C ) had the responsibility

for both upstream and down stream activities in the industry fos trade review (1996) vol. Iv

No. 5.

However, on April 1 1977, a merger between NNOC and the ministry of petroleum . resources created the Nigeria National Petroleum Corporation (NNPC). This become

effective with an enabling decree No. 2 of 1977.

To effectively carryout its operations, NNPC was decentralized in 1985, into five

semi-autonomous subsidiaries headed by a managing director. The five sectors were oil and

gas, refineries, petro-chemical, petroleum inspectorate and finally the pipeline and product

marketing company (PPMC).

The Pipeline and Product Marketing Company has the responsibility of providing

excellent customer services by transporting crude oil to the refineries through its marine

services department and the over all movement of white products to its various market. This

subsidiary is fully owned by NNPC and its main objective is to market refined petroleum

products in the domestic market as well as in the ECOWAS sub-region. They achieve these

through nktwork of refineries and depots scattered round the country. The PPMC now

operates and manages 18 depots and 4 refineries. The depots includes Enugu, Portharcourt,

Aba, Warri, Markudi, Ilorin, Benin, Calabar, Gombe, Marduguri, Minna, Shagamu, Suleja,

Lagos, as well as 3001 kilometer long network of pipeline. These depots store and market

petroleum such as

AGO-AUTOMOTIVE GAS OIL

PMS-PREMIUM MOTORS SPIRIT

DMC-DOMESTIC PETROLEUM KEROSENE

HPFO-HIGH POUR FUEL OIL

LPFO-LOW POUR FUEL OIL

Lube oils - Engine oil and lubricants of all grade.

In spite of all these operational arrangement by the NNPC and its subsidiaries the

PPMC, we still crippled by incessant fuel shortages brought about by low supply of the

product in relation to the demand. The history of fuel scarcity in Nigeria can be traced back to

1982, when NNPC was still in total control of activities in all operational areas. Though

scarcity still remain unabated up to six months the cause was attributed to the turn around

maintenance (TAM) at the Port Harcourt refinery and the low tank age capacity of our few

depots then in operation to store reasonable quantity of products, pending the resumption of

operations at the refinery. The 1982, scarcity was not too acute or severe which may be

attributed to the low consumption rate then, very few people own a car and the industrial

concern are making use of alternative source of energy i.e. coal, bitumen. As part of measure

aimed at arresting future occurrence, in 1985 the NNPC decentralized its operations for

efficiency and more responsive corporation. Automotive gas oil (AGO) was completely out

of stock as a result of illegal bunkering then at our various depots where products meant for

local distribution are diverted to waiting ships in the high sea for foreign exchange.

Despite the creation of a special parastatals to handle the marketing arm of NNPC,

fuel scarcity still persisted. Between 1994 and 1995 fuel scarcity was also experienced. In a

media reaction to the scarcity, the authorities of NNPC claimed that the scarcity was as a

result of breakdown of Kaduna refinery. The 1994 and 1995 scarcity was felt most in the

northern parts of the country which made northern pertroleum licensed marketers to transfer

their trucks to the south-east. This transfer created a vacuum in the internal fuel consumption

thereby creating shortage in supply. Unsuspecting marketers from the east now use this

opportunity to divert products meant for the east to north, making the then scarcity to be

nation wide affair. As if the hardship occasioned by the scarcity is not enough the Port

Harcourt refinery now went into turn around maintenance (TAM) which caused an untold

hardship to the populist.

The 1997-98 fuel scarcity became a source of study because of the operational

breakdown in all facet of the economy during the period under study. The 1997 and 1998 fuel

crisis remain almost unabated as a result of technological development and economic boom

which led to an increased ownership of automobiles and rapid industrial growth occasioned

by the industrial revolution. Consequently, the quest for he1 then was on the increase with

non-corresponding supply. Almost all the sectors of the economy were affected by 1997-98

fuel scarciiy in a chain reaction sequence. The scarcity in focus caused anarchy as there was a

correspondence signal on the economy which led to the scarcity of essential commodities,

consequently skyrocketing of consumer goods, decrease in national output below capacity.

The unavailability of diesel in which most industrialists depend for their machines made

employers to be unwilling to retain their work force as such unemployment escalates. There

was a consequent build up trade arrears.

The then military government could not help matters to salvage the situation. They hitherto

embarked on full scale importation with a laissez-faire attitude towards ascertaining the

possible causes and cure. The general public whom were thrown into untold hardship would

like to know the actual possible causes of the 1997-98 fuel scarcity and the possible cures

which brought it partially under control. The study will in no small measure help the

government to put in place appropriate policy decisions to guard against future occurrence.

STATEMENT OF PROBLEM

The 1997-98 fuel scarcity started during the first quarter of 1997, ever since then it

has remained unabated despite all the solutions proffered to arrest the situation.

In this study therefore, we intend to look into the operational efficiency of the

corporation in charge of petroleum distribution in the country. It is the believe of the

researcher that this apex organization has not lived up to its ratings which led to the continued

fuel shortages of the time. Hence the researcher wants to ascertain the causes and finally the

aims of 1997-98 fuel scarcity in Nigeria so as to know whether it is from NNPC the apex fuel

or its agencies or firm other stakeholders in the oil industry.

OBJECTIVES OF THE STUDY

Essentially, however, this research work is on the causes and cures of 1997-98 fuel

scarcity. Hence the researcher intends to achieve the following objectives.

1. To appraise the overall distribution function of PPMC to know if it has

contributed to the then scarcity under study.

2. To appraise the general operations of PPMC, unions in the sector and their various

activities during the period.

3. To ascertain the conditions of the following during the period under study.

A. Storage capacity

B. Maintenance level

C. Distribution channel

D. Discover areas of immediate attention

E. To ascertain the role of government agencies and marketers.

F. To make recommendations for further studies based on the finding of the study.

1.4 SIGNIFICANCE OF THE STUDY

At the end of the study, the output would benefit the following category of people

1. The national economic planners in the oil sector of the economy

. . 11. The general public, who bore the burden of the scarcity most.

. . . 111. Students will use the findings to appreciate the workings of various

policies in the oil sector of the economy.

1.5 SCOPE OF THE STUDY:

The study covers all the parts of the country East, West and North. The whole geographical

parts must be touched to really appreciate the impact. However, the major research data will

come from (9) states east of the Niger river, considering the finance at the disposal of the

researcher. Another major delimitation is that the study focuses only on the causes and cures

of fuel scarcity 1997-98.

All the delimitations enumerated above are considered normal for a study of this

nature in a developing country such as ours with paucity of information and data. None of

them should be considered serious as to invalidate the results.

1.6 LIMITATION OF THE STUDY

Every human policy has its inherent weakness and strength. As a result every

researcher needs to make inferences with cautions. This study is not without some inherent

pitfalls caused by some extraneous variable.

A major constrains on the researcher is that the research limits the time period

between 1997 and 1998 fuel scarcity crises. A sample size of 1891 was chosen by the

unbiased selection method and this constituted a limitation, since not all the

companies/organizations within the geographical areas of study could be covered in this

study considering the time and financial resources available at the researchers disposal.

Also incomplete response and some misleading information from the respondents

constituted another limitation of the study. However researcher have been as objective as

possible in analyzing the data received. To the extent, therefore, the research has some

limitations but non is considered so serious as to affect its validity.

1.6 DEFINITION OF TERMS:

CHANNELS OF DISTRIBUTION: These are the means by which the producers and

sellers use in sending their products to the market for final users. The channels are the tools to

move from production areas to consumers areas.

CHANNEL POLICIES:

These are decisions the marketing manager has to consider before a choice on a policy is

made.

INVENTORY MANAGEMENT:

This is concemed with the function of physical transfer of goods. It is concemed with the

efficient movement of raw materials from suppliers and finished goods from the end product

line to the consumers/users.

PETROLEUM PRODUCTS:

Petroleum product is defined as a mineral oil obtained from below the surface of the earth,

which produces after refining like petrol, diesel, paraffin and other lubricants.

SCARCITY:

This is defined as not available in sufficient quantity, not equal to the demand. Thus it is the

smallness of supply over demand.

DEPOTS:

This is the storage area through which refined products are distributed to their various

transport delivery zones.

CAUSES:

It is defined as that which produces an affect, thing, event etc.

CURE:

It has to do with restoration of normalcy to operation or bringing a situation under control.

REFINERIES:

This is a place where crude oil are converted through refining process into products like fuel,

diesel and kerosene for final consumption.

RESEARCH QUESTIONS:

This study seeks to answer the following questions:

1. What are the various causes of fuel scarcity in Nigeria?.

2. To what extent did the fuel scarcity of 1997-1998 affect the citizenry and the

economy of Nigeria?

3. What were the causes of 1 997- 1 998 fuel scarcity crises?

4. To what extend did the government and the public sector contribute towards the

1997- 1998 fuel scarcity?

RESEACH HYPOTHESIS

1. The 1997-98 fuel scarcity did adversely affect the citizenry and the economy of

Nigeria.

2. The federal government and the members of the Independent Petroleum Markets

Association of Nigeria (IPMAN) did contribute towards the fuel scarcity of 1997-98.

3. The regulatory measure adopted by the federal government to curb the 1997-1 998 fuel

scarcity in Nigeria was effective and successful.

CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.0 Nigerian National Petroleum Corporation (NNPC)

Petroleum products scarcity started within this parastatals under the federal ministry of

petroleum resources it may interest us to know actually the organization whose schedule of

duty is to provide an uninterrupted fuel supply within the country. Nigerian National

Petroleum Corporation is working strength to strength to accomplish these set goals as

provided by the decree establishing it. It has succeeded in adding two more refineries at

Warri and Kaduna. The Kaduna refinery had been upgraded from its initial capacity to twice

its former. The corporation is now building its fourth refinery at Portharcourt (new

Portharcourt refinery). They are also engaged in some off-shore refining arrangement to

supplement internal refining facilities. Through the efforts of NNPC, the country refining

capacity has increased impressively from 30,000 barrel of crude oil per day in 1997 when it

came into being to 230,OOObarrels per day in 1980 and progressively to 290,000 in 1987.

Soon when the new refinery goes on stream, the refining capacity will be 445,000 barrel per

day of crude oil.

It is one thing to refine crude oil to produce usable petroleum products but on the

other hand it is quite another to make these products available to its final users through

efficient distribution. To make these products available to designated comers and crannies of

the country NNPC embarked on the construction of network of pipelines linking its various

depots spread across the country. By the end of 1979 all the depots had been completed. This

was done to promote even development across the country. Inspite of all these measures

taken, long queues still persisted in our various fuel outlets (filling stations) across the

country in an unabated level.

2.1 THE PIPELINE & PRODUCT MARKETING CO. LTD (PPMC) & ITS

OBJECTIVES.

This is one of the subsidiaries under Nigerian National Petroleum Corporation, others

includes Nigerian Gas Company (NGC), integrated Data Services (IDS), Nigerian Petroleum

Investment Management Services (NAPIMS) Kaduna Refinery Petroleum Corporation

(KRPC), and Port Harcourt Refinery Petroleum Corporation (PHRPC). The pipeline and

products marketing arm of NNPC was established to provide excellent customer services by

transporting crude oil to the refineries and moving white products to exiting and future

markets efficiently and at low cost, through a safe and well maintained pipeline and depots. It

is also part of the mission of the company to profitably and efficiently market refined

petroleum and petrochemical products in the domestic as well as export market especially in

the ECOWAS sub region. They provide marine services and also maintained an uninterrupted

movement of refined products fro various local refineries. It is the wish of this organization to

make sure in a short while that its effectiveness and efficiency in the operations of its pipeline

network system will be comparable to those of its counterparts in the western Europe and

America.

The objectives behind setting up this subsidiaries were as follows:

1. To consciously minimize cost of services and other cost elements in the product price

determination.

2. The maximization of utilizing coastal vessels for products movement from the coastal

refineries to identified markets.

3. To determine and meet the national level of petroleum and petrochemical demand.

4. Stimulating sale of special products and import substitution of petroleum products

and special products (Naphtta, Wax, Dak, Bitumen)

5. It will develop profitable domestic and export market for petrochemical products.

The operations of this subsidiary is more complex now than before. The new out fit

now buys crude oil from the federation account on behalf of NNPC. It undertakes the

transportation to its various refineries for refining. It pays fees to the refining companies for

their services as obtainable in such arrangements. The products are now taken to various

depots through the pipe line system for distribution to various marketing companies.

2.2 COMMERCIALISED NIGERIA NATIONAL PETROLEUM CORPORATION

(NNPC).

In ascertaining the main causes of 1997-98 nation wide fuel scarcity, effort must be

made in the areas of the operational system within the parastatals. The essence of

governments privatization and commercialization programme is to encourage efficiency in

the operations of the corporations. Regrettably during the period under study, NNPC was

under partial privatization. NNPC which was the nation's premium economic corporation

bears such costs like storage, refining, transportation and distribution and was not subsidized

by the government.

Government's subsidy on crude oil to the NNPC stands at a whopping $41.6 billion

annually, it requires an addition S6.6 billion to refine, store, distribute and market petroleum

products. This amount is the difference between the total cost of providing the above services

and the revenue realized from the sale of all products at the present low price.

In the events of embarrassing fuel shortage, NNPC had to embark on full scale

importation of petroleum products, which drained into our reserved foreign exchange. This

reduces the product proceeds derived from domestic sales by about W2 billion. It is difficult

for NNPC to operate as a viable commercial enterprises with corporate strategic obligations

to the Nigerian nation. With the present policy of subsidizing with earnings from other

sources, something must be done to reduce the price distortion. The continued loses and delay

will force the activities in the refined produce distribution to a halt in no distant future. If the

present 95% government support is not maintained, there is no way NNPC and marketers can

provide efficient services. Thus there is an urgent need for substantial price increase, though

price change had been effected but more is still desired to defend the level of operations. The

minimum level of adjustment has to be between 250% to 300% in the prices of PMS, AGO,

DPK in order to sufficiently encourage NNPC and its marketing agents to continue providing

efficient and uninterrupted supply of fuel nation wide. In the words of Prof. Jubril Arninu

(1988) is to work towards eventual correct pricing which will place the following products as

follows:

PMS S20 per litre

AGO W9 per liter

DPK W per litre.

2.3 PETROLEUM PRODUCTS DISTRIBUTION IN NIGERIA GENERAL OVER

VIEW

Essentially, distribution refers to the activities carried out by marketing organizations

to make goods available to wholesalers, retailers and the final consumer. Distribution is the

second step in a series of economic processes, which brings good and services from those

who make to those that uses them.

Kotler (1996) pg. 392. The aim of distribution is to get goods and services from the

manufacturer to the ultimate consumer, transfemng titles and physical movement of

produced goods in the process. This means that any production exercise is useless if the

outcome of the distribution exercise is not made available to the user. According to Schewe

(1987) pg 33 "distribution is the process of making sure that the product is available where

and when it is needed". This activity, Schewe believed, provides time and place utility and set

the stage for possessions utility.

In petroleum industry, marketers are faced with many options of moving their

products to their final users. They can choose among different outlets and locations available

to them. This will depend on the volume of product, location of outlets and determine the

transportation mode.

In the view of Malcolm (1888) Pg. 207 "distribution is a term used in marketing

referring to the means by which a product or service is made physically available to

customers" this means that distribution encompasses such activities as ware housing,

transportation, inventory control order processing etc. in essence, distribution can increase

product availability because it can be used by marketing managers to improve the match

between benefit sought by customers and those offered by the organization. In his own

definitions, Cundiff eta1 (1964 Pg 14 or 15) defined distribution as a term once synonymous

with logistics in marketing. It stated that, distribution is the flow of purchases order from

producer to consumer via physical movement of goods and services. Stanton (1981) Pg 31

sees distribution as a marketing management function whose responsibility is to select and

manage the trade channels through which the product will reach the right market at the right

time. He went further to suggest that the marketing management task is also to develop a

distribution system for physical handling and transporting the produced products through the

channels of distribution.

Therefore distribution is the actual movement of goods and services fro the sources of

supply to the ultimate consumer. Hence distribution plays the all important role of providing

time, place and ownership utilities by bringing the goods and services at all time and place

they are needed.

The above are few among the scores of definitions of distribution by renewed scholars

in marketing. A critical analysis of these definitions will show that one thing is common to all

the definitions, that is, distribution is an activity which starts with the producer of a product

and ends with the consumer of the product. However, for the purpose of clarity the researcher

saw distribution as marketing activities that bridge the gap between the producers and

consumers in a marketing environment. In a developing economy, emphasis is now on

specialization and division of labour. All these creases gap within the system. Thus

distribution tries to bridge these gap through the performance of the following functions.

-Transfer of title of goods to the customer.

-Financing, repackaging of product purchased, in inventory and on transit.

-Storage of goods produced.

-Communicating information about a company, product, price, place and promotion

-The physical movement of product from the point of production to the point of usage

or consumption.

2.4 CHANNEL OF DISTRIBUTION

The term channel of distribution is a part of the working vocabulary of every

marketing organization yet many would be hard pressed to define its meaning precisely. This

is not surprising because a wide variety of interpretations and definitions are available in the

literature of the subject.

Howard (1975, Pg 179) sees marketing channel as the combination of agencies

through which the seller, who is often though not necessarily the manufacturer, markets his

product to the ultimate consumers. Onyebuagu (1995) maintained that marketing channels are

the paths that goods and titles follow from producers to consumers and that channels provide

time, place and ownership utilities. He is of the view that every producer seeks to link the

marketing institution that will help it best accomplish its distribution objectives. He

concluded by saying that distribution channels are the set of all the firms and individuals that

take title or assist in transferring title, to the particular goods or services as it moves from the

producer to the consumer.

Theodore Levitt (1972) Pg 38 explained that channel of distribution is the route taken

in transferring the title of a product from its first owner (producer) to its last owner, that

ultimate consumer.

Kotler (1996 Pg 389) defined distribution channel as a set of interdependent

organization involved in the process of making a product or service for use or consumption

by the consumer. This means that the distribution channel moves goods from producers and

manufacturers to consumers, which helps in bringing the gap of time, place and possession

that separe goods and services from those who will use them. The functions of distribution

channels includes gathering of information for marketing research and marketing information

system, contacts, which include communicating with prospective buyers, negotiation and

promotion activities.

Adirika et a1 (1997 Pg 220), distribution is the route or course taken in transferring the

title of a product from producer to its last owner. The researcher observed from the foregoing

definitions that all the authors that contributed has the same opinions and ideas. No matter

how the definition was given, distribution channel is the passage, pipe line, route or corridor

through which a product or service moves from the producer of product to the consumer who

is usually the user. So at one end of the rope is the manufacturer and at the tail end is the

ultimate consumer. In between them are the wholesalers, agents, brokers or the retailers.

2.4 BELOW IS THE DISTRIBUTION CHANNEL OF PPMC

refineries

d Road haulage mode nineline

(tankers)

+ depots

marketers I Major & independent

* Filling outlets Filling stations and industrial dumps

From the diagram above, one can see that the refineries are the source or the

manufacturer through which products are supplied to the PPMC pipeline system and road

haulage by the use of tankers. The PPMC now pumps to its various depots and distribute

same to licensed marketing companies who supplies to their filling stations. Regrettably this

channel is not being adhered strictly to as a policy. Rather some unorthodox practices

infiltrates the entire distribution policy channel. These infiltration includes products diversion

and smuggling of the product across the border. All these militate against products reaching

to its final consumers.

As a result of the huge price disparity between Nigeria and its neighbours, there is a

real incentive for smuggling of petroleum products to these other countries. Smuggling is the

illegal transfer of goods or services to other countries without due respect to the existing laws

guiding such transfers. Smuggling is a distortion of the policies guiding distribution. Most of

the marketing companies are not breaking even with the present profit margin accrued to

them that they resort to smuggle out the products meant for internal consumption to the

boarder. The effect of this unwholesome act cannot be neglected, it is one of the major

contributions of fuel scarcity in the country.

With Gasoline prices averaging W29.00 per litre in these countries, a 30,000 litres

load would fetch an average of about W20.00 as against H21000 in Nigeria. It is clear that the

financial incentives for petroleum smuggling is quite tempting, hence the problem of

smuggling has remained almost intractable. The net effect is a higher than real demand for

petroleum products which existing crude oil allocations can hardly meet, since these

marketers unofficially diverts these products to neighbouring countries to meet the deficit in

those areas.

Over the years, the activities of these unpatriotic petroleum products marketers had

come under criticism. The majority of these marketing organizations contravene the channel

rules of PPMC thereby creating a gap in the distribution system that cannot be easily closed.

The effort of PPMC in ensuring uninterrupted supply is being undermined by these

unscrupulous marketers. Bus. Link vol. No 3 April 1999, these acts perpetrated by these

undesirable elements slows down the economic activities, subjecting the poor masses of this

country to untold hardship.

2.5 APPRAISIGN THE SCARCITY OF FUEL DURING THE PERIOD UNDER

STUDY:

As earlier mentioned, one is consoled by the fact that a lot has been written and is still

being wrote on the possible causes and cures of 1997/98 fuel scarcity in Nigeria. It is a new

area of study and attempts are being made by erudite scholars in economics, public finance

and commentators on contemporary national issues. With the exception of few literature

culled from the areas of public financial management and economics, the greater part of the

literature reviewed are from such sources as journals, newspapers and seminar paper which

were the order of the day during the period under study. Nigeria is endowed with this mineral

resources (petroleum) as such it uninterrupted supply should be guaranteed by the

government agencies responsible for this sector of the economy. What led to its sudden

disappearance in the market is the main concern of this research. Yates (1960) defined a

product as anything that is capable of satisfying the needs, wants of the individuals. It could

be an idea, service, object or material. Human want are insatiable but there is a minimum

which can make them reach a breakeven but unfortunately the minimum cannot even be

attained, as such there is acute scarcity of the products.

Appleby (1991) defined a state of scarcity as a situation whereby the quantity of

commodity demanded is not proportionate to the quantity supplied. It is a state of NOT

ENOUGH' compared to the number of needs. Thus it is the smallness of supply over

demand. Oxford contemporary dictionary of English words defined 'scarcity ' as not

available of demand of fuel over the existing supplies. There is a persistent increase in the n

umber of users of fuel with a corresponding decrease in the quantity of fuel available.

Dan L. Etete, Nigeria former minister of petroleum in appraising the recent fuel

scarcity blamed the participants in the oil sector for allowing the fuel crisis to linger longer

than necessary. He spoke further on the possible causes of scarcity which includes the

following.

1. Continued vandalisation of pipelines

2. Unorthodox practices in the system such as diversion perpetrated by the

marketing companies.

3. Hoarding of petroleum products in expectation of price increase as a result of

fluctuation in the world oil market.

He exonerated his ministry from all the sharp practices at our various depots and refineries.

He offered that he had no apology in pointing accusing fingers on the marketers and other

participants in the sector.

In his reaction to the briefing by the honorable minister, the vice Chairman

Independent Petroleum Markets Association of Nigeria (IPMAN) Chief (Dr) Bestman

Aniekwe blamed the minister and his entire ministry for the long overdue scarcity. He

outlined the following as the possible causes of fuel scarcity.

1. Gratification from marketers to refinery and depots officials before loading.

2. Long overdue maintenance of the refineries and depots

3. Giving a lead to pipeline vandals by official of the refineries.

4. Backward pipeline system.

5. Ineffective distribution pattern.

6. General Importation of fuel

All these points outlined above should be well explained in the light of the need to know the

full consequences of their actions.

1. Gratification from marketers

Marketers were made to pay through their nose to the refinery and depots staff in

order to be allocated with products. These practices by the officials of NNPC negates the

allocation procedure of policy of PPMC, whereby marketers are given their quotas without

any conditions attached to it. The money paid as gratification now forms parts of the over

head cost of the marketing companies. The question now before him is how to raise this extra

cost of procuring the product, there is no nearest answer than to hoard the fuel in anticipation

of scarcity so as to sell at above pump price. This situation usually occurs during a scarce

period. ~k blamed the officials of the petroleum ministry for this ugly trend of event in the

industry. Saying that during scarcity period, people spend their last kobo to get the last drop

while others smile to their banks in taking advantage of the situation.

2. Long overdue maintenance of our refineries.

The long overdue maintenance of our refineries was considered by Chief Aniekwe as

one of the major factors in the on going fuel scarcity. The recent turn-around maintenance

(TAM) carried at Warri refinery as a result of connivance between the officials of NNPC and

the foreign technical company that carried out the job. There were allegations of bribery and

corruptions on the part of the foreign firms to Nigerians, to use obsolete equipment for the

maintenance. The contract can only boast of three functional refineries, obviously with one

being shut-down i.e. Warri the other two Port Harcourt and Kaduna can not serve the country

effectively and efficiently more so that Kaduna refinery is a 'glorified depot'.

The Government lost confidence in awarding further maintenance contracts with the

failure of Warri (TAM) perpetrated by over ambitious NNPC officials. As a result of the

present state of our refineries, is better said than imagined. Warri refinery services the south-

west zone but the breakdown now makes them to share with the south-east which invariably

will create a vacuum because too many people are now sharing what belongs to a very few.

The real truth is that a scarce situation will emerge because of the obvious gap in the system.

People are no longer getting the quantity or volume of fuel as they wished to at the ruling

price he contended.

3. Backward of pipeline system.

Chief Aniekwe blamed the authorities of the ministry for the continued use of the

backward system of distribution through the pipeline channel. He asserted that such outdated

system which impedes distribution network should be phased out in the light of the era of

high technology. During the construction the use of 'forward piping' system was neglected

making it impossible to push products forward from Port Harcourt to Warri in event of

scarcity in one area without relying on bridging which cost the country a fortune. The old

system of construction currently in use would not allow easy flow from one refinery to

another during emergencies. Note should be taken on whose responsibility it was to

normalize the situation, Government or the private sectors, the ministry should answer this,

he concluded.

The system of pumping fuel from refinery to depots is a closed system, it is a closed

system because the information on product movement is the exclusive privilege from Port

Harcourt product receiving areas (PRA) to depots. The question yet to be answered is how do

these vandals know when product is being moved to the depots through the pipeline. Nobody

knows the officials of NNPC working in the product receiving departments. He pointed out

that there is no smoke without fire that officials of NNPC must be conniving with the vandals

to disrupt the distribution system via pipelines which will invariable contribute to scarcity. He

accused the authorities of the oil industry for sabotaging the country's effort to alleviate the

suffering of the masses. He said such unwholesome practices will certainly cause a break

down in the overall system if not effectively checked.

5. GENERAL IMPORTATON

Furthermore Chief Aniekwe commented over the continued mass importation of fuel

with no attention paid to rescuer our refineries, he said that the government through its

agency W C derive joy in importation. The contract for importation is usually awarded to

influential people in the military. The profit reap is enormous making the government

nonchalant in addressing the situation, it reach a stage where it is no longer a national issue

for discuss. The minister was not even concerned with the situation and shun all attempt to

speak to the press on the current state of affairs in his ministry. The worse of it all is the

inability of the petroleum industry to study the trend of consumption before making

requisition for importation. Most a time the volume so imported is always low compare to the

normal consumption rate. Sometimes substandard fuel find their way into the country's sea

shores, it was a hell for vehicle owners as damage to their engine was the order of the day.

Who encourages importation as against repairs of our various refineries? Who is loosing or

who is gaining in this shady deal. In cause of the study the answer to these would be revealed

accordingly.

These were the explanation given by this all powerful unionist in defence of

marketers on the allegations leveled against them by the honourable minister of petroleum

durin gthe 1997-1998 fuel crisis. Both of them may be factual in their claims over all studies

will prove whose analysis that is in line with the overall studies.

In his appraisal of the crisis, the then Area manager Port Harcourt system 2E Dr.

Kombe ~ r i a d e pointed out that in order to combat the current spate, all that are concerned

must have the capabilities to plan, price the product appropriately, promote the product and

finally most importantly locate the products to the places most needed (distribution). He

emphasized that in appropriate location gives room for diversion, that is taking the products

outside the designated areas where they are needed. As a follow up to this contribution Mr.

Chris Chukwugwu editor of NNPC monthly bulletin NAPETCO decried the activities of their

party in the marketing and distribution of petroleum products within the period under review,

he point out that the activities of these elements contributed immensely to the prolongation of

the 1997-1998 fuel scarcity. He was quick at revealing the NNPC usually make adequate

provision of fuel in line with the logistic to follow unhampered, continue stock of petroleum

product all year round. To some reasonable extent the write up by Engr. Sam Oreje of NNPC

corporate department emphasized that apart from the obstacle witnessed in the marketing

process, the problems of processing the raw crude oil meet pipe line sales, lack of material

and inadequate technology to meet the effective challenges faced by our oil industry are the

some of the problems in the sector. From the write up, distribution perse is not the main

problem but the production of the product is where the problem lies, with lack of crude oil

and obsolete machinery the sector cannot do magic in providing uninterrupted supply of the

product within the system. In view of the high scale fraud recorded in NNPC during the

period under study not must can be expected from the nations oil ministry as no subvention

was released to them to put the refineries back to shape. The refineries were under utilized

because they are no longer producing to full capacity.

In a related publication JH CHINFOER pointed out that as a matter of fact that the

event of 1997-1998 fuel scarcity should be an eye opener for the country to start looking for

an alternative energy sources. He pointed out that most third world countries trust their

economic and social well being on the chargrin of oil which when accidentally derails from

the pedestal will lead them to severe hardship and debt burden. He advised in so far as the

consumers for fuel demands high standard of both technical and pollution free environmental

performance, there is the need for participants in the oil industry to join hands in findings an

altemative energy source. He is actually emphasizing on the need to discover an altemative

source of energy other than petroleum in order to brace-up in case of possible future

problems in the petroleum sub-sector of the economy.

In the light of the topic under study. It would be pertinent to delve further into their

aspects of distribution in the literature and relate it to the industry. Many opinion leaders in

the industry problems is still believe that distribution problem is major factor if properly

analyzed the situation,

CHANNEL CONFLICT.

Channel members are usually dependent on one another, they sometimes take

decisions on the best interest. They also disagree on the roles each play, that is on who to

perform a particular function in the distribution channel and for reward. Such disagreement

over goals and roles generate channel conflict.

Accordign to Kotler (1996P393) "a channel conflict is a disagreement among

marketing channel members on the roles and goals and the rewards to perform certain

channel job) SCHEWE (1987,p405) believe that channel members operate in dependently

towards different goals. These goals include, profit, sales, volume and development of a

particular image as a result, there will be competition among channel members.

Stanton in his view believed that there are two levels of conflicts. The horizontal

conflicts are conflicts in the channel of distribution, which may involve middlemen on the

same level of distribution. Examples are hardware store versus paint store.

The second channel conflict in the channel of distribution is conflict that involves firms on

different levels of the distribution channel which is called vertical conflict. This is the most

pronounced competition conflict in the present day distribution channel and these are conflict

between wholesalers, manufactures and retailers or between manufacturers and retailers.

Schewe (1987, p.405) horizontal conflict occurs between channel members at the

same level between two or more whole sellers and two or more retailers. This type Schewe

gave example of intermediaries of the same level type (two competing supermarkets) or

between two types of intermediaries, department store and discount store. Schewe also

believed that vertical conflict occurs between channel members at different levels of

distribution channel and system.

Onyebuagu (1995 p315) sees vertical conflict as conflict of interest between different levels

of the channel intermediaries. Example a producer who tries to enforce its price stabilization

policy in the market place, is bound to have conflicts with either his whole salers or the

retailers.

However, Kotler (1 996, P. 3 15) suggests that some conflict in the channel encourages

healthy competition. Such competition according to him can be good for the channel.

Without it, the channel will become ineffective and non innovative. But sometimes conflict

can damage a channel. We can now conclude from the review by various authors that channel

conflict has advantage and disadvantage and as a result cannot be avoided. What is required

in an effective channels management which Schewe says that it is the activities involve in

anticipation and understanding the sources of channel conflict and trying to minimize them.

This means that the channel of distribution will perform better it is include the mechanism the

has the power to assign roles and manage conflict.

2.6 INTERNATIONAL TREND IN PETROLEUM PRODUCTS PRICING.

In appraising the possible causes and cures for the 1997-1998 fuel scarcity, there is a need to

mention the relative price that is obtainable between Nigeria and other African countries.

This will help the study to know if there is any advantage on the part of our local markets in

trying to divert our petroleum products to other neighbouring African countries.

From all indications Nigeria is the lowest in terms of prices of petroleum products,

while the premium motor spirit retails for N20 per litre in Nigeria the aggregate average price

in other African countries stood at an equivalent of N27 per litre. Thus Nigeria pump price is

only about 4% of the current average price in other African countries.

Specially, for instance, the price for a litre of PMS in some neighbouring countries.

Benin - 24.50K

~ameroon - 26.20K

Niger 27.00K

Chad - 30.00K

These wide differentials between prices in Nigeria and other relatively poorer neighbouring

countries may have contributed immensely for the wide spread products diversion and

smuggling of products across our various borders and the frequent shortage that is causing the

entire populace considerable hardship. A country like Cameroon had to shut down an 80,000

barrels per day capacity refinery. Having found out that it is more cost effective to have her

citizens use cheaper petroleum products smuggled from Nigeria. There is of course the often

canvassed argument that most of our neighbouring countries are not oil producing countries

and that Nigerian's should pay lower price since we are so richly endowed with mineral

resources. The trend in the developed economies of the West and other OPEC member

countries would seem to deflate this argument. In the technologically advanced western

countries, specifically the OECD members like the U.S.A., Germany and United Kingdom,

gasoline prices are maintained at levels that are substantially higher than crude oil prices. In

order to cater for the total cost of supply and distribution, adequate returns on capital and

fiscal measures are adhered to. In these countries also there has been a conscious

maintenance of positive growth in product prices an average of 8% per annurn between 1987-

1992.

Among fellow OPEC member states like Venezuela, Indonesia and the United Arab

emirate, petroleum product prices are not less than the processed crude.

Relative to the trend in these other group of countries, Nigeria has maintained a monumental

decline of prices at an average of 29% per annum in real terms similarly the pump price of

motor spirit is only 30% of the cost of processed crude, 24% of the prevailing average price

of gasoline in the referenced OPEC countries and partly 5% of the OEC's countries.

Yet, the need for development and the demand for social services is higher in Nigeria

with a vast population of over 100 million than in most of these other countries, some of the

which have a very developed infrastructures and efficient social services.

Another commonly expressed argument against product price adjustment is that given

the present state of Nigeria's economy particularly the prevailing income levels, the 'average

man' cannot absorb higher prices. On the contrary, it will use Gross National Product (GNP)

per capita in relation to the affordability of goods especially petroleum products, there is a

scandalous distortion between Nigeria and other major African countries.

For instance, Zimbabwe with a GNP of $420, consumer buys P.M.S at the cost of

US$0.56 per litre, Ghana with income per capita of US$400 pays US$0.49 per litre while

Nigeria with income per capita of US$28O pays only US$0.038 per litre of (PMS).

CHAPTER THREE

3.0 RESEARCH METHODOLOGY

This chapter deals with the description of the procedure adopted in carrying out this

research. It describes the research design, the instrument for data collection, the population of

the study, sampling techniques and sample size and the techniques of data analysis.

3.1 THE RESEARCH DESIGN:-

This constitute the blue-print for the collection, measurement, and analysis of data.

The methodology used for the data collection comprises of a desk survey and field survey.

DESK SURVEY: SECONDARY SOURCES:-

The desk survey was aimed at:-

Identifying the various causes of fuel scarcity in Nigeria.

Identifying to what extent the fuel scarcity has affected the citizenry and the economy

of Nigeria.

Identifying the causes of 1997-1 998 fuel scarcity

Identifying to what extent the government and the public sector contributed towards

the fuel scarcity.

Establishing the various measures which have been applied to curb the fuel scarcity

And make some recommendations based on the findings from the research study.

Towards this end, the following establishments were consulted to obtain publications

and information.

Institute of Development Studies (IDS), University of Nigeria, Enugu Campus.

Central Bank of Nigeria, Library Enugu

British Council of Nigeria Library Enugu

Enugu Chamber of Commerce, Industry Mines and Agriculture (ECCIMA) Enugu.

The presidency (Petroleum Monitoring Unit, Abuja Federal Capital Territory.

University of Nigeria Libraries of Nsukka and Enugu Campuses respectively.

The National Library Enugu

Enugu State Library Enugu

Manufacturers Association of Nigeria (MAN) Enugu Chapter

National Association of Small-Scale Industrialist (NASSI) Enugu Chapter

Federal Ministry of National Planning and Logistics Abuja Federal Capital Territory.

The Federal Office of Statistics, Federal Secretarial, Enugu.

In addition to the information obtained from the above-named sources, information were also

obtained from newspapers, magazines and journal articles in the conduct of the study.

PRIMARY SOURCES

Utilizing the information collected from the desk survey and taking due cognizance of

the objectives and goals of the study, the necessary questionnaires were designed for data

collection. The nature of this study requires two sections of the questionnaires, namely.

A section for eliciting information and data from members of management staff of oil

companies in Nigeria, owners of independent filling stations. (Independent marketers) and

~ovenunent officials connected with petroleum taskforce etc.

Another section for eliciting information and data from the general public - i.e. the

consumers small-scale business operators and manufacturers.

3.1.2 Field Survey:

The importance of a properly executed field survey to the success of this research is

obvious, In order to achieve the objectives of the survey, the following methodology was

adopted in gathering information from the selected group of people as listed above.

(i) Actual visits to the organizations/companies

(ii) Distributing one copy of the questionnaire to each individual found in the

organizatiodcompany visited for prompt collection, and if this was not feasible, the copy of

the questionnaire was left behind for later collection.

During each visit, attempt was made to hold discussions with the

technical/management crew. Directly involved in fuel production, operations and planning

matters.

(iii) Distributing of one copy of the questionnaire to randomly selected individuals who

are not employees of the oil company or organizations visited.

3.2 Instrument for Data Collection:-

The instrument used for collection data for this study was the questionnaire. The

design included tabular, fill-in, scale (Rikert-type), open-ended, structured, multiple choice

and dichotomized questions. The questions were clearly simplified and structured in a way

devoid of any ambiguity and technical details. Thus most of the questions simply required

respondents to tick (4 ) against the appropriate responses.

3.3 Population:- The population for the study is made up of all the major oil companies

operates in Nigeria with their offices at Eastern district depots and independent oil marketing

organizations in the area. And some randomly selected residents of the states in the zone.

In all, a total of 1,891 persons (one thousand eight hundred and ninety one) in the city

were selected.

Below are the states from where respondents were selected for the study, Abia state,

Anambra state, Akwa Ibon State, Cross River State, Enugu State, Imo State, River State,

Ebonyo state, Baylesa state. The nine states fiom respondents were selected represented the 9

states across the River Niger.

It will not therefore be possible for the researcher to have a study of the entire

population because of time and financial constraints in order to get a reasonable significant

result of the study, it becomes necessary to use statistically determined sample size for the

research work so as to make a valid inference from the research result.

3.3 Sampling and S a m ~ l i n ~ Technique:-

The sampling criteria included, the stratified random sampling method Employed to

selected organizations1 companies fiom the following subsectors (MAN, 1998, p.p.v-vii) to

ensure adequate representation

i. Basic chemical pharmaceuticals

. . 1 1 . Motor vehicles and miscellaneous Assembly.

. . 11. Petro and petro-chemical industries.

(iv) Food, beverage and Tobacco

(v) Domestic and Industrial plastics

(vi) Electric and Electronic Assembly

(vii) Wood and wood products including furniture

(ix) Non-metallic mineral products, e.g. Glass, ceramics and cement.

Within each sub sector, deliberate selection method was employed to satisfy the

sampling criteria

3.4.1 Samplinp Size Determination

The sample was fully constituted based on the following unbiased estimate method

(Njoku, 1990, p. 40)

where n - - The population

N = The sample size

E - - The margin of error (0.07 in this case)

Thus N - - 1,891

E - - 7% or 0.07

Operative Assumption - - 7% margin of error

Sample fraction - - 20411 891 - 0.1 1

The researcher believe that the above number of questionnaires will be adequate to

give the study coverage, thus each state share of the questionnaire will be sent to major

branches of the organizations selected for the study.

Allocation of the questionnaires to state:

State Respondents

Anambra 402

Abia 29 1

Akwa Ibon 158

Cross River 120

Enugu 320

Imo 118

Rivers 139

Ebonyi 235

Bayelsa 108

Total 1,891

No of Questionnaire

402ll89l x 204 = 43

29111891 x 204 = 31

15811891 x 204 = 17

12011891 x 204 = 13

32011891 x 204 = 35

11811891 x 204 = 13

13911891 x 204 = 16

23511891 x 204 = 25

10811891 x 204 = 1 1

204

3.5 Techniques for Data Analysis:-

in the data analysis the following statistical techniques were employed Percentages,

Pie and Bar Charts, Histogram were used for descriptive purposes and to answer the research

questions. This techniques enabled the researcher to derive conclusions from some responses

that could not be subjected to hypothesis testing.

Chi- square was used to verify if there was any significant relationship between fuel

scarcity with poor planning by the government Authorities

Chie-square was used to verify to what extent the fuel scarcity affected the general

business activities within the country.

3.6 Test Technique Employed:-

The method of data analysis of by means of chi-square technique. It is defined as

shown below:-

x2 = C (Oi - ei)2 Ei

- Where x2 - Chi-square

Oi - - Observed date

ei - - Expected data

This investigative tool was selected to test for significance and ensure that the result

arrived at were valid and accurate and not by the rule of thumb.

CHAPTER FOUR

1.0 PRESENTATION AND ANALYSIS OF DATA.

This chapter deals with the presentation of data used to answer the research questions

and test the hypotheses.

The researcher made use of tables, figures, histograms bie and pie-charts and

percentages in presentations of research data. The researcher as already stated in the

preceding chapter, administered the questionnaires he prepared for the study personally and

in addition carried out oral interview to mop up other necessary information that will help in

making the study a master piece.

Out of 204 (Two hundred and four) questionnaires distributed to the respondents of

the various organizations and the residents of the area under study, 198 (One hundred and

ninety eight) were completed and returned to the researcher, the questionnaire used for this

study is classified as

Appendix 'A'

4.1 DATA PRESENTATION

Showing responses on problems experienced in obtaining fuel

Table 4.1

I I Yes 1 198 1 100

Response

1 Nil 1 Nil

No of Respondents % of Respondents

Source: Question 1

Total

Table 4.1 shows that all the 198 (One hundred and ninety eight) respondents out of 204 (Two

hundred and four) respondents sampled who return the questionnaire have experienced

problems obtaining fuel for their carsllonies. This represents 100% of the total respondents

who returned their questionnaires.

I Figure 4.1 I

198 100

Table 4.2

Showing response on the supply of Automatic gas oil

Response

Very adequate

Adequate

Not adequate

Not adequate at all

Total

Sources: Question 2

No of Respondents

12

69

117

Nil

198

Table 4.2 clearly shows that an infinitesimal 6.06% of the total respondents considered the

supply of automotive gas oil in their area to be very adequate. While 34.85% of the

respondents out of the 198 sampled were of the opinion that the supply of fuel in their area to

be adequate. Majority of the respondent 59.09% of the total sample stated that the supply of

Oh of respondents

6.06

34.85

59.09

Nil

1000

the product in their area was not adequate.

Figure 4.2 No adequate

adequate

150

100 /////// ///////

Table 4.3

Response showing the contributions of federal government of Nigeria towards the

causes of fuel scarcity of 1997198

Response

Yes

No

Source: Question 4

Table 4.3 indicated that out of 198 respondents sampled, 186, 93.94% were of the opinion

that the Federal Government of Nigeria contributed towards the causes of the fuel scarcity

crises of 1997-1998 while 12 or 6.06% of the total respondents did not favour the above

Total

view,

No of Respondents

186

12

Figure 4.3 200 , I

% of Respondents

93.94

6.06

198 100

TABLE 4.4

SHOWING THE RESPONSE TO QUESTION

I Response I No of Respondents

Great extent I Very great extent

Fair extent I l 5

4 8

I No opinion I Nil

% of Respondents

Total

Source: Question 5

198

The above table 4.4 depicts that 48 respondents of 24.24% of the total sample stated that the

Federal Government contributed towards the causes of fuel scarcity of 1997-1998. while 135

or 68.18% of the 198 respondents sampled stated that the Federal Government contributed to

a great extent to the fuel crises. Only 15 respondents or 7.58% of the 198 respondents hold

the view that the Federal Government contributed to the fuel scarcity of 1997-1998 to a fair

extent.

Figure t.4.

extent .Great extent

0 Fair extent

0 No opinion

Question: Did the government to anything towards the eradicatiodcurbing of the fuel

scarcity of 199711998.

Table 4.5

Response to the activities of the government towards

eradicationlcurbing of the fuel situation

Response

Yes

Source: Question 6

Table 4.5 above reveals that 141 or 71.21% of the total respondents sampled stated

that the government did something towards the eradicationlcurbing of the fuel scarcity of

1997-1998. while 57 or 28.79 of the total respondents stated that the government did not do

anything as far as they are concerned to eradicate or curb the fuel scarcity crises.

Question: Do you agree that the generality of the Nigerian Public Suffered Untold hardship

as a result of the 1997-1 998 fuel scarcity crises

Total

Figure 4.5

No of Respondents

14 1

% of Respondents

71.21

198 100

Table 4.6

Response to know the number of people that agreed to the assertion that generally of

Nigerian people suffered untold hardship as a result of 1997-1998 fuel scarcity

Responses

Strongly agree

Agree

Disagree

Strongly

Disagree

Total

No of Respondents

Nil

198

% of Respondents

Nil

Source: Question 7.

Table 4.6 above shows that 69 respondents or 34.85% of the respondents sampled

strongly agreed that the generality of the Nigeria public suffered untold hardship as a result of

1997-1 998 fuel scarcity. While 1 17 or 59.09% of the respondents sampled agreed on the

subject on consideration. Only 12 or 6.06% of the respondents stated that the generality of the

Nigerian masses suffered as a result of the fuel scarcity of 1997-1998.

Figure 4.6

-

Figure 4.6

Question: How effective was the government effort to curb fuel scarcity of 1997-1998.

Table 4.7

Response to know the effectiveness of the government to curb the fuel scarcity

% of Respondents Response

Very effective

Effective

Fairly effective

Not effective at all

Total

No of Respondents

15

48

135

Nil

198

Source: Question 8

The above table 4.7 clearly depicted that 135 or 68.18% of the total respondents

sampled stated that the government effort to curb the fuel scarcity of 1997-1998 was fairly

effective. While 48 or 24.24% of 198 respondents sampled stated that their effort was

effective. Only 15 or 7.58% of the total sample considered the government effort in the crises

to be very effective.

Figure 4.7

very effective

effective

Ofairly effective

not effective at all

Table 4.8

Response to know the contribution of the public sector towards the fuel scarcity of 1997-1998

Response

Yes

No of Respondents

I I

% of Respondents

198

Total

100

198 100

Source: Question 9

Table 4.8 shows that 198 or 100% of the total sample are of the same view that the

public sector contributed to the fuel scarcity of 1997-1 998

Figure 4.8 250 , I

Question: In what ways did the independent petroleum marketers association of Nigeria

(IPMAN) contributed to the fuel scarcity of 1997-1998.

Response to know the ways 1 PMAN contributed to the fuel scarcity of 1997-1998

Response

Allocation to favoured Marketers & Officials

Long over due

Maintenance of refineries

Pipeline vandalization

Ineffective distribution pattern

General importation of fuel

Total

No of Respondents

Respondent

Source: Question 11

Table 4.9 above shows that 121 or 61.11 of the total respondents believes that the

general importation measures adopted by the government support the efforts of the marketers

to eradicate problems in the industry, while 46 or 23.23% of the total sample stated that the

pipeline vandalization occasioned by frustration was favoured by the marketers possibly

sponsored some of the vandalization again 16 or 8.08% out of 198 respondents sampled

believed that the long overdue maintenance of our refineries which was neglected by the

government contributed to the causes of the fuel scarcity of the period under study.

Furthermore, 9 or 4.55% of the total respondent stated that ineffective distribution

patter adopted by the government contributed also to the fuel scarcity of the era. Allocation to

favoured marketers and officials and officials on

6.3.03% of the total sampled respondents.

Figure 4.9

Working

Allocation to favoured marketers and officials.

Long overdue maintenance of refineries

Pipeline vandalization

UAllocation to favoured r markets & I officials

L o n g overdue ~ai i tenace of refineries

Pipeline vandalization

Ineffective distribution Pattern

W General Importation of fuel

government directives accounted for

Ineffective distribution patter

Question: In what other ways did the Federal Govenunent contributed to causes of

1997-1 998 fuel scarcity.

Table 4.10

Response to know what other ways the government contributed to the fuel scarcity of 1997-1998

I Responses I No of Respondent Massive Importation of the Product

16

Failure to promptly repair the broken down refineries

% of Respondent 8.08

61.11

7.58

121

Lack of spare parts to effect the necessary

15

Repairs of the refineries Allowing all the refineries to break down at the same time

Source: Question 12.

Total

Table 4.10 above shows that 16 or 8.08% of the total respondents sampled stated that

46

govenlment contributed to causes of fuel scarcity of 1997-1998 when she adopted the

23.23

198

massive importation measures to solve the problem. The approach is short time measure

100

which only enriched those involved in the arrangements. While 121 or 61.1 1% of the total

respondents stated that the Federal government failure to repair the broken down refineries

contributed to the fuel scarcity of the period under study.

Again, 15 or 7.58% of the total respondent stated that the government failure to stock

the require spare parts contributed to fuel scarcity.

Finally 46 or 23.23% out of 198 sampled respondents maintained that the government

contributed to fuel scarcity when it failed to effect immediate repairs on the broken down

refineries as the problem occurred, instead of stockpiling the problem.

Figure 4.10

importation of the Product

F a i l u r e to promptly repair the broken down refineries

0 Lack of spare part to effect the necessary repaires of refineries

OAllowing all the refineries to break down at the same time

Failure to promptly repair the broken down refineries.

Allowing all the refineries to breakdown at the same period.

Lack of spare parts to effect the necessary repair on the refineries.

Massive importation of the product.

Response showing the regulatory measures adopted by the government to curb the 1997 - 1998 fuel scarcity.

Source: Question 14

Table 4.11 shows that out of 198 respondents 50 or 38.45% of them stated that the

government adopted monitoring task force to curb the 1997-1998 fuel scarcity. While 45 or

33.33% of the total population sampled stated that the government adopted allocation

measures as a means of curbing the fuel scarcity of 1997- 1998.

Massive importation option was favoured by 60 or 3.03% of the entire sample

Responses

Use of monitoring task forces

Allocation measures

Massive importation

Presidential task force

Total

sampled.

No of Respondent

50

45

6

34

198

% of Respondent

38.45

33.33

3.03

100

Furthermore a total of 34 or 25.09% of the respondents of the total population

sampled favoured the government adoption of presidential task forces as a regulatory

measure.

Figure 11

10 Allocation measures I I Iw Massive importation I1 Presidential task fn... 11

Table 4.12

Showing the responses on the regulating measures by the government whether it is

successful.

Responses

Yes

No

Source: Question 15.

Total

No of Respondents

136

12

% of Respondents

93.94

6.06

198 100

Table 4.12 above shows that 136 or 93.94% of the total respondents sampled stated that the

regulatory measures adopted by the government was successful. While 12 or 6.06% of the

sample stated it was not successful.

Figure 4.12 f I

Table 4.13

Responses showing the effect of 1997-98 fuel scarcity on the national economy.

Responses

Drain of scarce foreign exchange

Unemployment

Reduction on the general

production level

Low profitability and inflation

Retrenchment of workers

Total

No of Respondents % of Respondents

23.23

4.55

61.1 1

Source: Question 16

Table 4.13 above shows that 46 representing 23.23% of 198 respondents sampled

believed that the 1997-98 fuel scarcity caused a drain to scarce foreign exchange of the

nation. While 9 or 198 respondent sampled stated it led to organizations retrenchment of

workers, further 12 1 or 61.1 1 % of 198 respondents sampled stated that fuel scarcity of the

period caused a remarkable reduction on the general production level on the economy. Again,

6 or 3.03% of 198 respondents sampled stated that it led to unemployment of workers.

Finally 16 or 8.08 of the total sample (198) stated the fuel scarcity of the period led to

low profitability and inflation within the economy.

ODrain of scarce foreign exchange

l Unemployment

OReduction on the general production level

OLow profitability and inflation

Retrenchment of workers

Workinps

Remarkable reduction on the general production level.

Figure 4.13

Economic unrest and retrenchment of workers.

Unemployment L x 360= 198 1

Drain of scarce foreign exchange

Low profitability and inflation

29'

Table 4.14

Responses showing the extent the fuel scarcity affected citizens and the nation and economy.

Responses Very great extent

Great extent

Fair extent

No opinion

Total

Sources: Question 17

No of Respondents 135

Nil

% of Respondents 68.18

Nil

Table 4.14 shows that out of 198 respondents sampled 135 or 68.1 8% of then stated

that the fhel scarcity of 1997-1998, the citizenry and the national economy to a very great

extent. While 48 or 24.24% of 198 respondents sampled stated that the scarcity to a great

extent affected the citizenry and the national economy. Only 15 or 7.58% of the total

respondents stated that the fuel scarcity of the period affected the citizenry and the economy

to a fair extent.

Figure 4.14

extent

.Great extent

OFair extent

UNo Opinion

Workinm -

Very great extent

Great extent

Fair extent

Responses showing whether the unavailability of the product made dealers to embark

on sharp practices.

Table 4.15

Source: Question 18

From the above table 4.15 is clearly seen that 198 or 100% of the sample agree with

the statement that the unavailability of petroleum products during 1997-1998 resulted to

dealers engagement in many sharp practices.

Response

Yes

No

Figure 4.15 250 , I

No of Respondents

198

Nil

% of Respondents

100

Nil

ANALYSIS OF RESEARCH OUESTIONS

RESEARCH QUESTION 1

Responses showing the various causes of fuel scarcity in Nigeria.

Responses

Consistent vandalization of

the pipe line

Unorthodox

practices of

Officials

Sabotagelfreqi

failures

and sharp

IPMANIGovt .

uent equipment

Total

Table 4.2.2

No of Respondents % of Respondents

Source: Question 3.

Table 4.2.1 above indicated that 48 respondents representing 24.24% of the total

respondents sample were in agreement that the consistent vandalization of the pipe lines

contributed to the causes of fuel scarcity in Nigeria, while 135 or 68% of 198 respondents

sample believe that the unorthodox and sharp practices (i.e. hoarding) perpetrated by

members of the independent petroleum marketers Association of Nigeria and government

officials was the major cause of the scarcity. Only 15 or 7.58% of the total respondents stated

that sabotage and frequent equipment failures at the refineries were responsible towards the

fuel scarcity.

2.2.2 RESEARCH QUESTION 2

To what extend did the fuel scarcity of 1997-1998 affect the citizenry? And the

economy of Nigeria?

Refer to the analysis of table 4.14.

Question 17 of the attached appendix "A"

4.2.3 RESEARCH QUESTION 3

What were the causes of 1997-1998 fuel scarcity in Nigeria.

Table 4.2.2.

Responses on the causes of fuel scarcity between 1997- 1998

Response

Gratification from IPMAN to

refineries and depot official

before loading and lack of

spare parts.

Long overdue maintenance

of the refineries.

Ineffective distribution

pattern and allowing

refineries to break at the

same time.

Massive importation of fuel.

Total

No of Respondents

Source: Question 12

% of Respondents

Refer to the analysis of table 4.10 above.

4..2.4 RESEARCH QUESTION 4

To what extent did the federal government and the public sector contributed towards

the 1997- 1998 fuel scarcity in Nigeria?

Refer to table 4.3 and 4.8, figures 4.3 and 4.8 respectively above for the analysis of

this question which appear on Appendix "A" (Questionnaire) numbers 4 and 11 respectively.

4.3 TEST OF HYPOTHESES:-

Operative assumption: The following assumption are made for the purpose of this

test.

(a) Level of significance = 5% or 0.5

(b) Expected data - - - Oi k

Where Oi = Total observed data K - - Number of options.

Table value of x2 0.05 - - 3.841

Decision: reject Ho, because the calculated value is more than the table value

198 > 3.841

(Calculated value) Table value)

Therefore accept Hi which says that there was fuel scarcity in 1997-1998.

HYPOTHESIS I

Test: To test whether the 1997-1998 fuel scarcity did adversely affect the citizenry and the

economy of Nigeria.

Statement of Hypothesis

1 Ho: The 1997-1998 fuel scarcity did not adversely affect the citizenry and the

economy of Nigeria.

Hi: The 1997-1998 fuel scarcity did adversely affect the citizenry and the

economy of Nigeria.

Analytical tool Employed.

x2 = (Oi - ei) ei

Where x2 = Chi-square

Oi = Observed data

ei = Expected data

Level of significance = 0.05 or 5%

Degree of freedom (df) = (c-1)

Df = (2-1) (4-1)

- - 3

Decision Rule: Reject null hypothesis (Ho) if the calculated value is more than

the table value; other wise accept Ho.

Table 4.16

Response

Strongly Agree

Agree

Disagree

Strongly Disagree

Total

Calculated value of x2

Table value of ~ ~ 0 . 0 5

Decision Rule: Reject the null hypothesis because the calculated value is more than

the table value.

177 > 7.815

(calculated value) (Table value)

Therefore accept alternative hypothesis (Hi) which says that the 1997- I998

fuel scarcity did adversely affect the citizenry and the economy of the nation.

HYPOTHESIS 2

Test: To test whether the federal government and the members of independent

petroleum marketers Association of Nigeria (IPMAN).

Statement of Hypothesis

Ho: The Federal government and the members of Independent petroleum marketers

Association of Nigeria (IPMAN) contributed towards the 1997-1998 fuel scarcity in Nigeria.

Hi: The Federal Government and the members of Independent petroleum marketers

Association of Nigeria (IPMAN) contributed towards the 1997-1 998 fuel scarcity in Nigeria. I ANALYTICAL TOOTL EMPLOYED

x2 = (Oi - ei)2 Ei

- Where x2 - Chi -square

Oi = Observed data

Ei = Expected data

Level of significance = 0.05

Degree of freedom (do = (c-1) (R-1)

Where C - - Number of columns

R - - Number of Rows

Df = (2-1) (4-1)

DECISION RULE

Reject the null hypothesis )Ho) if the calculated value is more than the table value,

otherwise accept Ho.

Table 4.17

Response

Very great extent

Great extent

Fair extent

No opinion

Total

Calculate value of x2 - Table value of x2 - 7.8 15

Decision: The Null hypothesis (Ho) should be rejected since the calculated value

is more than the table value.

22 1.272 > 7815

(calculated value) (Table value)

and the alternative hypothesis (hi) which says that the federal government and the

members of independent marketers Association of Nigeria did contribute towards the 1997-

1998 fuel scarcity in Nigeria shall be accepted.

HYPOTHESIS 3

Test: To test whether the regulatory measures adopted by the federal government to

curb the 1997- 1998 fuel scarcity in Nigeria was effective and successful.

STATEMENT OF HYPOTHESIS

Ho: The regulatory measures adopted by the federal government to curb the 1997-

1998 fuel scarcity in Nigeria was not effective and successful.

Hi: The regulatory measures adopted by the federal government to curb the 1997-

1998 fuel scarcity in Nigeria was effective and successful.

ANALYTICAL TOOL EMPLOYED

- x2 - (oi -ei12 ei

Where x - - Chi-square

Oi = Observed data

ei - Expected data

Level of significance = 0.05

Degree of freedom (df) = (c-I) (r-1)

Where C - Number of columns

R - - Number of Rows

Df = (2-1) (2-1)

DECISION RULE

Reject the null hypotheses (Ho) if the calculated value is more that the table value,

otherwise accept Ho.

Table 4.18

Calculate value of x2 - - 152.90

Table value of x 0.05 - - 3.84

Decision: Reject the null hypothesis since the calculated value (152.90) is more that

the table value (3.841) and accept the alternative hypothesis (Hi) which says the regulatory

measures adopted by the federal government to curb the 1997-1998 fuel scarcity in Nigeria

was effective and successful.

Response

Yes

NO

Total

oi

186

12

198

(oi-ei)'

ei

76.45

76.45

152.90

Ei

99

99

198

Oi-ei

+87

-87

0

( ~ i - e i ) ~

7569

7569

15138

CHAPTER FIVE

Summary of findings, Recommendations and conclusions.

In this chapter, the findings arising from the present research study are

summarized. Following the summary are the recommendations, conclusion and suggestions

for further research in that order.

In the summary that follows, the research questions are discussed first one after the

other followed by the hypothesis and other items in the questionnaire not covered in the

hypothesis testing or research questions.

5.1 SUMMARY OF FINDINGS:

The answers to the research questions are presented as follows:-

5.1.1. RESEARCH QUESTION 1

What are the various causes of fuel scarcity in Nigeria?

Table 4.2.1 and figure 4.2.1. above indicated that:-

Consistent vandalization of the pipe line accounted for 48 or 24.24% to cause of fuel scarcity

in Nigeria. While 135 or 68.18% of the respondents stated that the unorthodox and the sharp

practices of Independent Petroleum Marketers Association of Nigeria (IPMAN) and

government officials assisted immensely to the fuel scarcity.

Again, sabotage and frequent equipment failures was another contributing factors

towards the fuel scarcity in Nigeria as confirm by 15 or 7.58% of the 198 respondents

sampled.

QUESTION 2

To what extent did the fuel scarcity of 1997-1998 affect the citizenry and the

economy of Nigeria?

Table 4.14 and figure 4.14 indicated that: 135 or 68.1 8% out of 198 or 100% of the

respondents stated that 1997-1998 fuel scarcity affected the citizenry and the economy of

Nigeria to a very great extent. While 48 or 24.24% of the total sample stated that the fuel

scarcity affected then to a great extent. Again 15 or 7.58% of the 198 respondents sample

stated that the fuel scarcity affected them to an extent.

QUESTION 3

What were the cause of 1997-1998 fuel scarcity in Nigeria?

Table 4.10 and figure 4.10 respectively stated that the government failure to promptly repair

the broken down refineries contributed to causes of 1997-1998 fuel scarcity. The above table

and figure shows the respondents answers to the question 12 1 or 6 1.1 1 % of them held the

view while 46 or 23.23% of the 198 respondents stated the government allowing all the

refineries to breakdown at the same time as one of the causes of the fuel scarcity. The

massive importation posture adopted by the government to tackle the problem was

highlighted as one of the causes of the fuel scarcity by 16 or 8.08% of the 198 respondents

sampled. While 15 or 7.58% of the sample stated lack of spare parts to effect the necessary

repairs the refineries as a cause to the fuel scarcity.

5.1.4 QUESTION 4:

To what extent did the federal government and the public sector contribute towards

the 1997- 1998 fuel scarcity in Nigeria?

Table 4.3, 4.8 and figure 4.3 and 4.8 respectively indicated that the Federal

government and the public sector contributed towards the 1997-1 998 fuel scarcity in Nigeria.

Table 4.3 and figure 4.3 shows that 186 or 93.94 of 198 respondents sampled stated

that the federal government of Nigeria contributed towards the causes of 1997-1998 fuel

scarcity in Nigeria. While 12 or 6.06% of the sample hold a different view.

Table 4.8 and figure 4.8 respectively indicated that the public sector contributed to the

1997-1 998 fuel scarcity in Nigeria as 198 or 199% of the respondents are the view.

5.1.5 HYPOTHESIS 1

The hypothesis where there was he1 scarcity in Nigeria in 1997- 1998.

Chi-square was the analytical tool which was employed to test two of the hypothesis

formulated. (i.e the null and alternate hypothesis). From the decision rule applied the null

hypothesis (Ho) which stated that there was no fuel scarcity in Nigeria in 1997-1998 was

rejected as the calculated value was more than the table value. The calculated value of x2 =

198 while the table value x2 0.05 is 3.841.

HYPOTHESIS 2

The hypothesis tested whether the 1997- 1998 fuel scarcity did adversely affected the

citizenry and the economy of Nigeria.

Chi-square was applied to test the null and the alternative hypothesis formulated to

verifL the validity of the opinions.

From the calculations, it was observed that the calculated value of Table 4.17 and

figure 4.17 respectively was more than the table value (177 > 7.815). Therefore the

alternative hypothesis which stated that the 1997-1998 fuel scarcity did adversely affected the

citizenry and the economy of Nigeria was accepted.

HYPOTHESIS 3

The hypothesis tested whether the regulatory measures adopted by the federal

government to curb the 1997-1998 fuel scarcity in Nigeria was effective and successful.

The calculation from table 4.19 above shows that the calculated value of x2 = 152.90

to be greater than the table value of x 0.05 which is 3.841 the decision rule stated that if the

calculated value is greater it should be accepted over the table value.

Therefore, the alternative hypothesis which stated that regulatory measures adopted

by the federal government to curb the 1997-1998 fuel scarcity in Nigeria was effective and

successful.

5.1.8 Other findings and figures 4.15 respectively.

Table 4.15 shows that the unavailability of the automotive gas oil (fuel) in 1997-1998

periods resulted to dealers on the products engaging in many sharp practices.

5.2 RECOMMENDATIONS:

On the basis of the finding of this research, the following recommendations are proposed. For

the short and long term solutions to the problem of fuel scarcity.

5.2.1 SHORT-TERM MEASURES:

The short term measures includes:

( 9

(ii)

(i i i)

priority attention should be given to industries (i.e. big carrier - transport

companies) mass transit companies during fuel crises since they convey more

passengers.

Importation of the product to assist during the crises period is alright to an extent,

however, it should not be seen as a measure.

Removal of the bottlenecks imposed on dealers by the depot and government

officials which leads to increase in prices.

LONG TERM MEASURES:

All over the world, the level of development and performance of the manufacturing

sector determined the level of industrialization of individual nations. As this is the case, there

is every need that fuel which is the blood to power the machines in the industries is

constantly available. The life of everyone is directly or indirectly dependent on fuel.

The economic planners must endeavour to make long term projections of the spare

parts requirement s of the refineries procure and have them handy at all times.

The management of the refineries must constantly monitor the refineries repair or

maintenance schedules. They are to effect repairs immediately problems are noticed.

The sharp practices of independent petroleum marketers Association of Nigeria the

study revealed, arise from scarcity and the monies they are made to pay before taking

deliveries of the product from the depots.

In view of these obvious facts, the government planners must endeavour to see

that the refiners produce and pump out enough fuel to the depots. Again very strict and

enforceable laws need to be made by the legislative arm of the government against sharp

practices at the depots.

Such a law may include complete withdrawal of defaulters operating licenses.

SUMMARY

If all the recommendations adduced above are implemented, not only will there be

accelerated development and growth in the oil industry, but the entire society stands to gain

7 8

by way of improved services, less transport cost, less time at the service stations, higher

standard of living and place in the group of the industrialized nations of the world.

CONCLUSION:

This study has been directed at determining the causes and cure of 1997-1998 fuel

scarcity in Nigeria.

To achieve the objective 4 research questions were formulated.

The study has been able to establish as follows:-

(i) The causes of fuel scarcity.

(ii) The extent to which the fuel scarcity of 1997-1998 affected the citizenry

and the economy of Nigeria.

(iii) What were the causes of 1997-1 998 fuel scarcity in Nigeria

(iv) To what extent the Federal government and the public sector contributed

towards the 1997-1998 fuel scarcity in Niger.

The four hypothesis formulated to verify the above led the researcher to accept the

alternative hypothesis after the application of chi-square on each of them as reflected

above.

To the above presentation and determine enquiry the researcher at this

juncture avers that the research study will go along way to assisting all those that come in

contact with it as enumerated in the significance of the study.

5.4 SUGGESTIONS FOR WRTHER RESEARCH.

Further research could investigate the following areas:-

(i) The implication of New increase in workers wages and the increase of fuel pump

prices by the government.

(ii) Fuel-As blood of a Nation study of current developments in the industry as it

affects Enugu metropolis.

Daniel Warner (1979)

Kotler P & Armstrong g.G. (1996)

Schewe C.C (1987)

Theodore Levitt (1 972)

Malcon A.B & Macdonald (1995)

Stanton W.J (1987)

Onyebuagu S.C. (1995)

BIBLOGRAPHY

Adirika E.C. Ebue & Nnohim D.A (1997) Principles and Practice of Marketing lSt

ed,Enugu. John Jacobs Ltd.

Cundiff E.W, & still R. (1964) Basic marketing concept Environment

and decision 1" Engleword cliff N.J.

Prentice Hall.

Marketing and distribution An overview

1'' ed, New York

Macgrad-hill

Principles of Marketing 71h ed, New delhi

Prentice Hall of Indian private Limited.

Marketing Principles and Strategies 1''

ed New York Random House Inc.

Marketing Intangible Product and

Product Intangible Harvard Business

Review

Marketing plans 5th ed. London

Heinemann professional publishing Ltd.

Fundamentals of Marketing 61h ed.

Contemporarv Marketing Principles and

Harvard .J. (1975)

8 1

Practice, Global Rays academic

Publishers Ltd.

Modem Marketing thought 1'' ed. New

York Macontian Ltd.

JOURNALS/MAGAZINES/REFERENCES

Export word (1990) vol. 1 No 2 March

Federal office of statistics

Federal office of statistics

NAPECTOR NEWS Vol. 1 No 2 (1990)

NAPECTOR NEWS Vol. 4 No. 5 (1998)

IMPMAN EW LETTER Vol. 5 No. 2 (1998)

ENERGY NEWS (1999)

(a publication of ministry of petroleum

resources)

Survey data (1 999)

Business link vol 1 No. 3 April (1998)

Trade review (1 998) Vol. 3 No 5

Trade review (1 996) Vol. Iv No. 5

Discovery of crude

Private sector Participation in Oil

Marketing By Dan. L. Etete.

Causes of fuel scarcity in Nigeria by

Bestman Aniekwe

Alternative energy sources

by J.H. Chinfoer

Socio eco. Dev.

NAPECTOR NEWS VOL 1 1 No. 3 March (1997) matters of the moment survey.

NAPECTOR VEWS VOL 1 NO. 1 Jan, (1993) Appropriate pricing of Petroleum

Products

NAPECTOR NEWS VOL 11 NO 4 April (1990) Supply and distribution corporate

induction course.

APPENDIX "A"

Department of Marketing

Post graduate studies unit

Faculty of Business Administration

University of Nigeria.

Enugu campus.

Dear Respondent,

Mr. Fidelis Okafor the researcher is a master of Business Administration (MBA)

candidate in the above department and faculty, He is currently conducting a research study

entitled "causes and cure of fuel scarcity of 1997-1998"

In view of the above, the researcher writes to request for any information which you

feel will assist in his effort. Every information given will be treated with all confidentiality

and used purely for the purpose of this research only.

Instruction: please tick ( 4 ) in the appropriate column or fill in the appropriate space

as may be applicable to you.

SAMPLE QUESTIONNAIRE

1. Have you ever experienced problems obtaining fuel for your carllorry?

2. How adequate was the supply of automatic gas fuel in your area.

(a) 'very adequate

(b) Adequate

(c) Not Adequate

(d) Not adequate at all I I

3. Which of the following factors contributed to the fuel scarcity of 1997-1998 in

Nigeria?

(a) Consistent vandalization of pipe line

(b) Unorthodox and sharp practices of marketers

(c) Hoarding of petroleum products in anticipation of possible price increase

(d) Sabotage-frequent equipment failures u

4. Did the Federal Government of Nigeria Contribute towards the causes of fuel

scarcity of 1997-1998 n 5 . If your response to the above question is "yes", to what extent

(a) Very great extent u (b) Great extent 0 (c) Fair extent

(d) NO opinion 'I 6. Did the government do anything towards the eradication / curbing of the fuel scarcity

(a) Yes

7. Do you agree that the generality of the Nigeria public suffered untold hardship as a

result of 1997- 1998 fuel scarcity crises.

(a) Strongly agree 0 (b) Agree

(c) Disagree

(d) Strongly disagree 0 8. If you response to question "6", above is "yes", How effective was their effort.

(a) Very effective 0 (b) Effective 0

(c) Fairly effective

(d) Not effective at all

9. Did the public sector contribute towards the fuel scarcity of 1997-1998. - 10. If "yes" to question 9; To what extent did the public contributed Towards the he1

scarcity?

(a) Very Good extent u (b) Good extent

(c) Fair extent n (d) Above average extent I I

11. In what ways did the Federal Government contributed to the fuel scarcity of 1997-

1998.

(a) Gratification fi-om marketers to refineries and depot

official before loading.

(b) Long overdue maintenance of the refineries

(c) Pipe-line vandalization 0 (d) Ineffective distribution pattern 0 (e) General importation of fuel 0 12. In what other ways did the Federal Government contribute to causes of 1997-1998

fuel scarcity

(a) Massive importation of product u (b) Failure to promptly repair the refineries u (c) Lack of spare parts

(d) ~ l l o w i n ~ all the refineries to breakdown at the same time L-l

14. What regulatory measures did the government adopt to curb the

1997-1 998 f~lel scarcity?

(a) Introduction of monitoring task forces

(b) Allocation measures n (c) Massive importation of the product I I (d) Presidential task force u

15. Was the regulatory measures adopted by the government successful?

(a) yes No C 16. What was the effect of 1997-1 998 fuel scarcity on the national economy?

(a) Drain to scarce foreign exchange El (b) Retrenchment of workers El (c) Remarkable General productive level l-l

(d) Unemployment

(e) Low profitability and inflation

17. To what extent did the fuel scarcity of 1997-1998 affect the citizenry and the national

economy.

(a) Very great extent

(b) Great extent

(c) Fair extent

18. The unavailability of automotives gas oil (fuel) in 1997-in 1998 period resulted to

dealers engagement to many sharp practices.

(a) True (b) False

19. Did the public sector do anything to stop the fuel scarcity of 1997- 1998.

(a) Yes (b) No

20. In what ways did the independent petroleum marketers Association of Nigeria

(IPMAN) contribute to the scarcity of 1997-1998.

(a) Hoarding u (b) Smuggling out of the product (i.e. unorthodox practice of dealers u (c) Sponsorship of pipe line vandalizations u (d) Black market operation

(e) Gratification paid to depot officials