PETROLEUM DISTRIBUTION: PROBLEM AND SOLUTIONS
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PETROLEUM DISTRIBUTION: PROBLEM AND SOLUTIONS
Chapter one
INTRODUCTION
1.1 Background of the Study
It is obvious that whenever more than one individual participates in an activity or organisation, there will be friction. Since it has been recognised that the majority of rational actions include people, there is a need for direction to reach the purposes, goals, and objectives.
Fuel shortages and distribution issues began in late 1993, and were ascribed to the year’s labour and political crises. The black market for petroleum has become the norm. The market used by thieves in the suburbs and nearby states does not require filling stations or fuel pumps.
Petrol was sold in any container and at free market prices. In light of this, merchants realised that it was a quick way to share money and no longer had to wait for the NNPC Depot to negotiate for fuel delivery and bribe their way through.
This is why many Nigerian analysts believe that petroleum scarcity is a result of the NNPC’s crushing crisis. According to internal sources, the NNPC does not intend to refurbish the refineries.
Another reason why local demand for petrol is readily depleted is the high rate of product smuggling across borders. Most NNPC executives agreed that smuggling costs Nigeria up to 600,000 litres of petrol.
PPMC, a NNPC subsidiary, declares the volume of allocations to each state ahead of shipment in order to combat smuggling. The legislation was intended to allow the government to monitor the distribution of petrol in their states.
Finally, the governors, administrators, and marketers will be held accountable for any petroleum diversion in their respective states. Indeed, NNPC investigations have indicated that up to 30% of all fuel intended for local consumption is lost through smuggling.
Today, numerous state governments, like Enugu State, have established task teams to combat this harmful behaviour, but even soldiers do not appear to be able to arrest the situation, as entire tanker loads of fuel continue to disappear.
As the government works to combat petrol smuggling, smugglers are inventive in devising new ways to get around the law. For example, petrol is sold to these smugglers at irregular intervals, and the jerry cans are heaped in sacks and covered with cloths or garri to avoid task force authorities.
The chronicle of petroleum distribution cannot be complete without noting the industrial action (strike) taken by the National Union of Petroleum and Natural Gas Workers, NUPENG, and the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSON, which resulted in their proscriptions.
This strike action by NUPENG and PENGASSON paved the way for unlicensed dealers to grow to prominence, resulting in a statewide scarcity of petroleum supplies. The trading network is so well-coordinated and large that it failed.
It was widely assumed that the military assisted several tankers loaded with the product in attempting to be diverted to locations other than the official destinations. Military troops engage in corrupt killings, selling to their officers and collecting money from civilians.
The military personnel’s involvement is also established farther down the commerce chain, as the majority of them receive their consignment in drums on a regular basis from filling stations that sell at night rather than daytime.
The operations of black marketers have remotely affected the suppliers of fuel to several filling stations in Enugu and across the country; long queues are usual
with people leaving their vehicles in queue for days on end. In light of these chronic problems and potential solutions, our interest in studying them grows.
1.2 Statement of the Problem
1. Diversion of petroleum products by tanker drivers and smugglers.
2. Illegal fuel dealers and hoarders.
3. The National Union of Petroleum and Natural Gas Workers launched an industrial action during the peak of the business.
An Enugu army sergeant was recorded indicating that illegal petrol sales yield an average profit of N3000 per day. He obtains fuel from filling stations and other privileged sources at official rates and distributes it to his boys to sell at exorbitant black market prices.
The army sergeant desired that the crisis would continue because his family had recently been able to satisfy the majority of its long-standing debts thanks to this windfall. He thanks God for his mercies, as he has nothing to show for his 25 years of work.
Now, due to the fuel issue, he has purchased household appliances like as a colour television, video recorder, fan, refrigerator, and so on in recent weeks. This demonstrates that petroleum product trafficking has taken the lead as the most profitable business in Nigeria, with instant riches aplenty, and that many people have abandoned their means of subsistence to participate in this illegal trade.
Petrol has become liquid gold, yielding dividends in jumps comparable to narcotics trafficking. Most portions of Enugu are littered with locations (black markets) where business is performed in broad daylight without fear of being apprehended by security agents.
The black markets have taken advantage of the opportunity provided by the industrial activities initiated by the National Union of Petroleum and Natural Gas Workers and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSON).
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