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PETROLEUM DISTRIBUTION IN ENUGU STATE PROBLEM AND SOLUTIONS

CHAPTER ONE

 1.1            BACKGROUND OF THE STUDY

It is evident that whenever more than person is involved in an activity or organization, there is bound to be friction. Since it has been established that occurrence of most rational activities involve people there is therefore need fro guidance in order to achieve the aims, goals and objectives.

Fuel shortage and their attendant distribution problems started in the later part of 1993 and were attributed to labour and political crisis of that year. Black market for petrol has come the order of the day. The market which thieves in the suburbs and the surrounding states does not require filling stations or fuel pumps. Petrol was sold in any type of container and as a free market prices. Against  this background, the businessmen seeing that it is a brisk way of sharing money, no longer had to wait for the NNPC Depot to negotiate for supply of fuel and to bribe way through for supply. This is why many Nigerian experts in petroleum scarcity is the result of the crushing problem at the NNPC. The NNPC, inside sources confirm is not disposed towards refurbishing the refineries.

Another reason why local demand for petrol is easily dashed is the high incidence of smuggling of the products across the borders. Most NNPC officials agreed thatNigerialooses up to 600,000 liters of petrol through smuggling.

The curb smuggling, the pipeline and product marketing company, PPMC a subsidiary of the NNPC declare the volume of allocations to every state ahead of supply. The measure was to enable the government to monitor distribution of petrol in their states. At the end of the day, the governors administrator and the marketers will account for any diversion of petrol in their states. Indeed NNPC;s investigations has revealed that up to 30 percent of all fuel meant for local consumption is lost through smuggling. Today various state government including Enugu State have set up task      forces at stem this destructive practice but even the soldier do not seem able to arrest the situation since whole tanker loads of fuel still disappear. As government seeks to correct the smuggling of petrol, the smugglers are ingenious in discovering new ways of circumventing the law. For instance, petrol is sold to these smugglers at odd times and the jerry cans of petrol are stacked in bags and covered with cloths or garri to evade task force officials. The  story of problem of petroleum distribution cannot be complete mentioning the industrial action (strike) embarked by National Union of Petroleum and National Gas Workers, NUPENG and the Petroleum and Natural Gas Senior Staff Association of Nigerian, PENGASSON while led to their proscriptions. This strike action by NUPENG and PENGASSON served as a stepping stone for illegal dealer to rise to the top and scarcity of petroleum products nationwide. The network of the trade is so well coordinated and vast failed.

It was generally alleged that military helped many tankers loaded with the commodity often tries to be divested to other places other than the official destinations. The military personnel exhibit corrupt kills selling to their officers and collecting money from people. The military personnels involvement is also established, down the trade chain as most of them get their consignment in drums regularly from filling stations who sell at night father than during the day. The activities of black marketers have remotely affected the suppliers of fuel to many filling station inEnuguand across the country, long gueues are common right with motorists leaving their vehicles on queue for days an end. In view of these chronic problems and solution to that, out interest to the study in emanates.

 1.2     STATEMENT OF THE PROBLEM

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

2.       The illegal fuel peddlers and fuel hoarders

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

An army sergeant ofEnuguwas overheard saying that he makes an average profit of N3000 daily from illegal sales of petrol. He gets fuel from filling stations and other privileged sources of official rates an hands over to his boys to sell at exorbitant black market price.

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

 1.3     PURPOSE OF THE STUDY

The government provides certain indispensable public services without which community life would be unthinkable and which by their nature cannot be appropriately left to private enterprises and petrol is one of such services. In view of this, this study focuses mainly on the following objective in an attempt to arrives at an optional distribution of petroleum inEnuguState.

 To appraise petroleum distribution inEnuguState

  1. To find out whether the military then perpetuate the problems of petroleum distribution in the state.
  2. To find out other problems which militate, against optional distribution of petroleum inEnuguState.
  3. To find out a suitable solution to the petroleum distribution inEnuguState.

 1.4     SIGNIFICANCE OF THE STUDY

The study is very timely, especially today that all hands are on the desk to enhance the development and growth of Nigerians economy. This study will be of immense benefit to public organization and the organized private sector to determine the extent of their budget effectiveness.

In addition, the study will determine the factors or problems limiting budget effectiveness of these organization. It is expected that the finds will help to bridge any gap that may exist and to make these (NUPENG) and the petroleum and Natural Gas Senior Staff Association of Nigeria.

  1. Sub-let of contracts by contractors to in competent unqualified engineers for turn around maintenance (TAM).
  2. Poor management by the (PPMC) pipeline and product marketing company head Alhaji Hanna Abubakar.
  3. Damaged pipeline and short down of Warri andKadunarefinery and epileptic performance of the plant in Port-Harcourt.

 1.5     RESEARCH QUESTIONS

To determine  the problem of petroleum distribution inEnuguStateand solutions, this research is set out to test among others the following:

  1. How do petroleum dealers and pump attendants inEnuguStatefeel about the problems of petroleum distribution?
  2. What are the functions of the Governor in distribution of petroleum inEnuguState?
  3.  Why are petroleum dealers and pump attendants happy over the scarcity of petroleum in the state?
  4. What is the effect of petrol trafficking (black market) by illegal dealer in the distribution of petroleum in the state.
  5. What are the solution embarked by the government to solve the problem of petroleum distribution in the state?

 Enterprises  effective or more effective in budget planning and execution. It is necessary to investigate the budget planning and execution of public enterprises, and to evaluate their effectiveness especially today that we walk of privatization and commercialization.

Public enterprises must achieve their cooperative objective, it is obvious that the federal, state and local government would be wasting huge some of money being pumped into these enterprises. In addition, the country’s aspiration to attain high economic growth and development will not be realized.

Through this investigation, therefore, both public and private enterprises will understand their shortcomings or weak points and will subsequently adopt measures aimed at enhancing their budget effectiveness.

The public enterprises will equally borrow the story points of the private organizations to make for more effective budget planning and execution.

 1.6     SCOPE AND LIMITATIONS OF THE STUDY

          The study is designed to cover the concept and structure of petroleum distribution and to critically analyze the problems attended thereon. A research work of this nature is one which is capable of obtaining an overall and thorough coverage of the entire state.

          This is practically impossible as one is often constrained by a number of factors including inadequate resources such as finance, material and time.

Nevertheless, an attempt of a logical analysis of available data shall be made inspite of these limitations. Any interpretation and conclusion from this report should to used, with these limitations in mind.

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