Petroleum products distribution system in Nigeria: Nature, mechanics and challenges
Аннотация
This study x-rayed the Nigerian petroleum industry with special focus on its nature—in terms of units, players, and regulatory authorities—their operational mechanics, and the challenges they face as they impact citizens’ welfare and the economy. Extant literature on the dynamics of regulations that created these actors and guide their roles and functions in the industry was reviewed. To bridge theory and practice, distribution theories and models were lucidly discussed, highlighting how the Nigerian economy has become constrained due to non-adherence to popular distribution principles and ethics, as well as the prevalence of sharp practices. This situation is compounded by regulatory incapacity to enforce control.
Further model analysis provides insights underscoring the distribution paradigm in the industry, including supply and demand chain management and their integration to predict the flow of products, information, finance, risk, and more—with special focus on achieving efficiency. Comparative analyses were made between the Nigerian experience and countries like Malawi and Kenya, especially regarding pricing. Factors impinging on the effectiveness of the petroleum distribution system in the economy discussed include constrained infrastructure, price instability, and the open tender system, among others.
The study concludes that given the prevalence of sharp practices, regulatory connivance, and price instability, the industry can hardly be described as stable. This instability negatively impacts citizens’ welfare and the economy. Recommendations include building domestic refining capacity, curbing militancy in the Niger Delta, and improving transparency in the distribution system.
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