A COMPARATIVE ANALYSIS OF THE CHALLENGES IN PETROLEUM PRODUCT DISTRIBUTION IN NIGERIA DURING THE ADMINISTRATIONS OF GOODLUCK JONATHAN AND MUHAMMADU BUHARI

A COMPARATIVE ANALYSIS OF THE CHALLENGES IN PETROLEUM PRODUCT DISTRIBUTION IN NIGERIA DURING THE ADMINISTRATIONS OF GOODLUCK JONATHAN AND MUHAMMADU BUHARI CHAPTER ONE INTRODUCTION 1.1 Background of the Study The production of goods cannot be deemed complete until those goods are successfully delivered to the consumers for whom they were produced. Any typical business quickly realizes that its customers are scattered across different regions. Therefore, it is not sufficient for a company to merely choose whether it will distribute its products directly through its own retail outlets or indirectly through intermediaries like wholesalers and retailers; it must also guarantee that its products are accessible or supplied to these distribution channels. The topic of petroleum product distribution has attracted substantial attention from researchers and academics alike (Agbalajobi & Alaba, 2017; Ehikwe & Ngwoke, 2018). Nigeria is a nation richly endowed with natural resources such as petroleum, limestone, natural gas, tin, among others (Onyeukwu, 2017). Among these, petroleum has emerged as the cornerstone of Nigeria’s economy since the 1970s, while other resources remain largely untapped. The Nigerian oil sector is broadly categorized into two segments: the upstream and downstream sectors. The upstream arm deals with exploration and production, whereas the downstream sector focuses on the refining of crude oil and the distribution of these products for domestic use. Petroleum products typically reach consumers through either local refineries or imports. As defined by Anyadiegwu (2015), petroleum product distribution refers to the transfer of refined oil from refineries to end users across various delivery locations within the country. Effective distribution ensures that petroleum products are delivered to service stations and retail outlets situated in different regions to meet consumers' needs. The distribution process involves several complex and static characteristics such as extended lead times and limited primary distribution capacity. Although various modes of transportation are employed at different phases of the distribution network, logistical limitations stemming from geography or resource availability often restrict these methods, reducing flexibility (Hassen & Szucs, 2022). In Nigeria, the Pipelines and Products Marketing Company (PPMC) holds the sole mandate to handle the delivery, distribution, and marketing of petroleum products across the nation. According to Adeleke and Ehinomen (2022), until recently, the distribution framework was highly organized, with a pipeline network stretching nearly 4,000 kilometers and connected to 21 strategically positioned depots throughout the country. Petroleum derivatives could be sourced from any of the four domestic refineries; in times of short supply, however, products were imported from foreign refineries. Besides pipelines, roughly twenty marine tankers are employed to transport significant volumes of high-demand petroleum products from coastal refineries located in Warri and Port Harcourt to urban centers like Lagos (Adeleke & Ehinomen, 2022). Consequently, a large proportion of petroleum products are also transported using road tankers and trailers across Nigeria. This practice has exposed serious inefficiencies in the downstream petroleum sector, which is responsible for refining and marketing oil products. The sector continues to grapple with numerous challenges due to the complicated logistics of product distribution. Petroleum product distribution is widely considered more complex than distribution in most other industries because of the extensive processes involved before and after refining (Hussain et al., 2016). The complex nature of this distribution network demands a strategic and systematic decision-making approach. This necessity has given rise to the use of optimization tools and other scientific methods such as linear programming. Stakeholders in the sector have increasingly adopted these methods to address persistent distribution challenges. Akpan and Nnamseh (2015) highlight that one of the most pressing issues facing Nigeria is devising effective strategies to guarantee the constant availability of petroleum products for domestic use. Abdulmalik and Omokoghio (2019) further observe that persistent issues like short deliveries and long lead times worsen the distribution situation. Distribution inefficiencies are also exacerbated by deteriorating road infrastructure, fragile transportation networks, and systemic obstacles such as delays at checkpoints operated by police, military personnel, tax agencies, and customs officials (Olagunju, 2021). Furthermore, the inland transportation of petroleum products is plagued by issues such as high freight charges, traffic congestion, sluggish delivery speeds, mechanical breakdowns, and even criminal activities like armed robbery (Obasanjo & Nwankwo, 2015). Inadequate and inefficient storage facilities also hinder effective distribution operations. These factors—limited supply, poor storage, and inefficient distribution—continue to pose significant challenges. Past attempts to resolve these problems have largely failed, contributing to inflation and a declining standard of living. Hence, this study aims to analyze and compare the challenges associated with petroleum product distribution in Nigeria during the administrations of Goodluck Jonathan and Muhammadu Buhari. 1.2 Statement of the Problem Distribution serves as a vital component in every marketing enterprise, industrial operation, and retail chain. Soundly planned and executed distribution policies are critical to achieving cohesive operations and reaching organizational objectives. However, issues often emerge in settings where distribution policies are either poorly defined or entirely absent. Typically, the prices of petroleum products experience significant inflation or volatility, largely due to the activities of various intermediaries in the distribution chain. This situation raises questions about the necessity of these intermediaries and whether effective regulation of the distribution system could help mitigate excessive pricing and supply shortages. Hussain (2016) emphasized that poor distribution systems can cripple marketing efforts. In Nigeria, the effective distribution of petroleum products has been impeded by several factors, particularly during the presidencies of Goodluck Jonathan and Muhammadu Buhari. This research, therefore, seeks to explore and assess the core issues related to inefficient petroleum product distribution in Nigeria, and to compare the distributional strategies employed during both administrations. 1.3 Objective of the Study The overarching goal of this study is to evaluate the distributional challenges of petroleum products in Nigeria under the administrations of Goodluck Jonathan and Muhammadu Buhari. The study’s specific objectives include: i. To examine the root causes behind petroleum product scarcity in Nigeria. ii. To identify distribution challenges encountered during the Goodluck Jonathan administration. iii. To assess the problems experienced during Muhammadu Buhari’s administration in terms of petroleum product distribution. iv. To propose viable recommendations for improving petroleum product distribution in Nigeria. 1.4 Research Questions This study seeks to answer the following key questions: i. What are the main causes of petroleum product scarcity in Nigeria? ii. What distribution problems were prevalent during the Goodluck Jonathan administration? iii. What challenges emerged in the distribution process during Muhammadu Buhari’s administration? iv. What are the best strategies to enhance petroleum product distribution in Nigeria? 1.5 Research Hypotheses The following hypotheses have been developed to guide this research: H₀: There is no significant difference in the petroleum product distribution challenges between the Goodluck Jonathan and Muhammadu Buhari administrations. H₁: There is a significant difference in the petroleum product distribution challenges between the Goodluck Jonathan and Muhammadu Buhari administrations. 1.6 Significance of the Study This study is particularly significant given Nigeria’s status as a major oil-producing nation. Despite generating substantial export revenue from petroleum—reportedly around 90%—the country continues to suffer from recurrent fuel shortages, indicating systemic issues in the product distribution chain. Ideally, such a scenario should not exist. Additionally, petroleum distribution plays a crucial political, economic, and social role in national stability. If neglected, it could severely disrupt the country’s socio-economic fabric. This study will also contribute to academic research by enriching existing literature and providing a foundation for further investigation into the subject. 1.7 Scope of the Study The study will investigate the underlying causes of petroleum product scarcity in Nigeria. It will also assess distribution-related problems experienced under both the Goodluck Jonathan and Muhammadu Buhari administrations. Finally, the study will offer practical recommendations for improving petroleum product distribution nationwide. Accordingly, the research is limited to the timeframes of the two administrations in question. 1.8 Limitations of the Study As with most academic endeavors, this research encountered a few limitations. Financial constraints restricted the researcher’s ability to access extensive materials and data sources. This also affected data collection through channels such as the internet, questionnaires, and interviews, thereby necessitating a smaller sample size. Additionally, the researcher had to manage this study alongside other academic responsibilities, which limited the time available for research activities. 1.9 Definition of Terms Petroleum: A liquid compound composed primarily of hydrocarbons, extracted from beneath the earth's surface and refined into products like petrol, diesel, and paraffin. Product: Any item that has been manufactured or processed for sale. Distribution: The process of delivering goods or services to various end users or recipients. 1.10 Research Methodology This section outlines the research strategies employed to conduct the study. Various methodologies are available for answering research questions; however, this study uses historical research and adopts a descriptive method for data collection. Data will be sourced primarily from secondary sources such as books, journals, magazines, online databases, conference proceedings, and both published and unpublished works.