Full Project – Effective petroleum product distribution and consumer satisfaction

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CHAPTER ONE

INTRODUCTION

• BACKGROUND OF THE STUDY

The development of the petroleum industry in Nigeria started several years ago. The first oil exploration was carried out in 1908 by a German company called D’Acry, an Anglo-Dutch company in 1937. Source: (NNPC journal 2006)

Petroleum products are useful materials derived from crude as it is processed in oil refineries (Adeoye 2009). Every day, hundreds of millions of companies and individuals but these products at wholesale or directly from retail outlets that number in the hundred of thousand worldwide. Example of petroleum products includes kerosene, home heating oil, diesel, fuel and gasoline.

Petroleum distribution plays a dominant role in dictating the pace growth of the national economy given an enabling environment. The marketing and distribution of petroleum takes place on a vast global scale. It is an indisputable fact that the poor distribution of petroleum products is embedded in the inefficiencies and corruption in the management of the petroleum support fund (PSF) and sharp practices in the downstream sector of the oil industry.

Due to scarcity and poor distribution of petroleum products, the federal government in July 19, 2011 begins electronic monitoring of petroleum product distribution in a bid to stem the large scale fraud associated with the distribution of petroleum products from the major deports to the hinterland nationwide.

According to Nigerian National Petroleum Corporation (NNPC) about N15 billions paid annually to petroleum products transporters, for distributing products nationwide, which is billed into every liter of products purchased by consumer.

• STATEMENT OF THE PROBLEM

Most companies in the Nigeria oil marketing industry are faced with the problem of effective management in the distribution system i.e. a system that can render better services to the customer and at the same time corporate goal or return an investment of shareholders

The breakdown of refinery has distorted the distribution of petroleum products in the nation. Due to the breakdown of refinery in the nation, petroleum products has become a scarce commodity

The perennial shortage of petroleum products in Nigeria has been a source of great concern to successive government of this country and the oil marketing companies. It became imperative therefore, to answer these following questions:

• What are the causes of poor petroleum products distribution?
• What impact has petroleum product distribution on consumer satisfaction

To answer these questions, are the reasons why he researcher is carrying out this research.

• OBJECTIVE OF THE STUDY

    The objectives of this study are as follows:

• To determine the impact of effective petroleum product distribution on consumer satisfaction.
• To determine the impact of effective petroleum distribution on sales volume.
• To ascertain the effect of government policies on petroleum product distribution.
  • RESEARCH QUESTIONS

The research question of this research work among others includes the following;

• To what extent does petroleum product distribution affect consumer satisfaction
• To what extent does petroleum product distribution affect sales volume?
• To what extent do government policies affect petroleum distribution?
  • HYPOTHESES FORMULATION
• H_O: There is no significant relationship between effective petroleum product distribution and consumer satisfaction.

H₁:  There is a significant relationship between effective petroleum product distribution and consumer satisfaction.

• H_O: There is no significant relationship between government policies and petroleum product distribution.

H₁: There is a significant relationship between government policies and petroleum product distribution.

• SIGNIFICANCE OF THE STUDY

This study will be of great importance to petroleum marketers and distributors to create and organize an effective distribution system that is cost effective and contributes toward consumer satisfaction and the return on investment.

It would also be of great significance to differentiate levels of government for policy formulations.

• SCOPE/ LIMITATIONS OF THE STUDY

This project is expected to cover firms in the petroleum industry with emphasis on effective petroleum product distribution and consumer satisfaction i.e. the effect petroleum products have on consumer satisfaction.

However, this work would deal with the major variables affecting distribution of petroleum products and consumer satisfaction. Generally, and in particular, the experience of MOBIL OIL NIG. PLC. We hope to obtain information from transporters, dealers’, sales representatives who are in charge of programming, loading and distributing of petroleum products at their various locations. Most information and data would be gathered from MOBIL OIL NIG. PLC, Warri.

Lack of finance, time and response from respondents in completing the questionnaire are some of the limitations encountered by the researcher.

1.8    DEFINITION OF TERMS

• Product distribution: The creation of place and time utility in order to create satisfaction to consumer.
• Petroleum: These are mineral oil that forms under the ground or sea and it is extracted through holes bored beneath it or useful material derived from crude oil as it is processed in oil refineries.
• Consumer satisfaction: The extent to which product/service offerings exceed consumer’s expectations.

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Full Project – Effective petroleum product distribution and consumer satisfaction