PIPELINE TRANSPORTATION AND ITS SIGNIFICANCE TO THE MARKETING OF PETROLEUM PRODUCTS IN SOUTH EAST, NIGERIA

Background of the Study

Pipeline transportation is the latest mode of transport in South East Nigeria, receiving limited attention due to its relatively recent emergence Its operations are primarily managed by the Federal Government, as it is not in the hands of private individuals or companies, which has contributed to its underdevelopment in the region.

Nigeria's economy is heavily reliant on the oil and gas sector, which constituted approximately 80% of government revenue, 90-95% of export earnings, and over 90% of foreign exchange revenues in 2004 As Africa's leading oil producer and one of the top 10 globally, Nigeria's oil and gas production is predominantly located in the Niger Delta Region, encompassing nine states: Abia, Akwa-Ibom, Bayelsa, Cross-River, Delta, Edo, Imo, Ondo, and Rivers.

Pipelines have been utilized for centuries to transport various materials, as noted by Kupoliyi (2000: 98) In urban areas, pipelines play a crucial role in distributing potable water While the networks designed for water transportation in cities tend to be shorter, they operate on the same fundamental principles as those used for distributing petroleum products.

Pipelines were initially developed for distributing potable water, but their use has since expanded to include the transportation of gases and various liquids in industrial settings Today, they play a crucial role in the long-distance transportation of petroleum products and other liquids.

Olakunori (2000:208) reported that petroleum pipelines made recent discovering into Nigeria According to him, the products pumped through the Nigeria pipelines include the following:

• Premium motor spirit (PMS) otherwise known as petrol;

• Automotive Gas Oil (A G 0), otherwise known as diesel;

Aviation turbine kerosene (ATK), commonly referred to as avgas, is regularly pumped from Mosimi to Abuja and Ikeja Airport in batches ranging from 15,000 to 50,000 cubic meters to prevent contamination The delivery of various product grades into storage depots is meticulously monitored and controlled from control centers in Mosimi, Warri, Kaduna, and Port Harcourt Once pumping commences and the product departs the refinery tanks, the arrival time at specific depots, such as Aba, can be accurately predicted.

Liquidified natural gas (LNG) is transported through the Escravos-Lagos pipelines (ELP), which is currently the only operational gas pipeline in the country (Adeyinka 2000:43) The pipeline network consists of five systems—2A, 2B, 2C, 2D, and 2E—each supported by pump stations located in Altas Cove, Mosimi, Ibadan, Kaduna, Zaria, Jos, Gombe, Escravos, Port Harcourt, and Enugu Additionally, booster pump stations are situated along the Warri-Kaduna pipeline at Abudu, Auchi, Lokoja, Abuja, Izom, and Sarkin Pawa The distribution of petrol is facilitated by four refineries: Port Harcourt I and II, and Warri (Amodu 2000:19).

The products from Kaduna's refineries are distributed across the nation via a network of strategic storage depots, pumping stations, jetties, and pipelines From the eastern region, pipelines transport products from the Port Harcourt refinery to the Aba pumping station, then to Enugu, which serves as both a storage depot and pumping station, and finally to Makurdi In the west, pipelines extend from the Warri refinery to a storage depot in Benin, continuing to Ore, Ikorodu/Lagos, Ibadan, and Ilorin Additionally, a dedicated crude oil pipeline runs from Warri through Benin to Auchi and then to Kaduna In the northern region, pipelines connect the Kaduna refinery and storage depot to Zaria, Gusau, Kono, Jos, Gombe, and Maiduguri, with pumping stations located in Zaria and Jos.

The Nigerian government aims to expand its gas pipeline network to various West African countries, as noted by Udensi (1999:27), to promote gas utilization and tap into the commercial opportunities within the sub-region.

The construction of the Phases I-III pipeline system is pivotal for the Nigerian Government, as it facilitates the establishment of additional distribution depots in Sulaja and Minna This system also connects the Kaduna Refinery products depot with the refineries at Port Harcourt and Warri, addressing production shortfalls and ensuring a steady supply of products to Northern regions during any outages at the Kaduna Refinery Additionally, it includes the construction of facilities that allow for efficient pumping of products, enhancing overall distribution capabilities.

To ensure a continuous supply during a total outage, a route from Port Harcourt to the Western regions via Benin will be established Additionally, essential alterations, upgrades, and repairs will be implemented within the current system to support the integration of new facilities Furthermore, addressing the limited capacity of the existing 6-inch diameter pipelines between Jos and Gombe is crucial for improving efficiency.

The completion of strategically located petroleum product pipelines and storage depots across the nation enhances the distribution and marketing of these products Utilizing mainline and booster pumps, the transportation of petroleum products through these pipelines demonstrates their reliability as a distribution method.

Statement of the Problem

Transporting petroleum products via pipelines in Nigeria faces significant challenges, including product scarcity, pipeline vandalism, and aging infrastructure These issues raise concerns about the effectiveness of pipeline transportation in ensuring a consistent supply of petroleum products across the nation Without addressing these critical problems, the reliability of pipeline distribution in Nigeria's oil industry remains questionable.

In the United States, where crude oil imports exceed domestic production, pipelines play a crucial role in the petroleum transportation system, ensuring the energy needs of millions of consumers across all fifty states are met With daily consumption reaching approximately 19.5 million barrels of petroleum products, the country has consistently avoided fuel scarcity, highlighting the importance of an efficient pipeline network.

The Nigerian National Petroleum Corporation (NNPC) has faced criticism for management greed, which has impacted the efficiency of oil transportation in the country The speed of pipeline transport is influenced by various factors, including pipe diameter, transport pressure, terrain, and oil viscosity In 2010, NNPC proposed the development of new 48-inch diameter pipelines, recognizing that previously laid smaller pipelines may have contributed to past petroleum product shortages Unlike the U.S., where diverse supply patterns cater to varying consumer needs across regions, Nigeria's pipeline infrastructure has struggled to meet demand effectively.

Larger and smaller diameter pipelines work together to efficiently transport petroleum products over varying distances The Pipeline and Product Marketing Company (PPMC), a subsidiary of NNPC, monopolizes the distribution of refined petroleum products to depots across Nigeria This centralized system can lead to potential conflicts of interest among PPMC management concerning the allocation of petroleum product volumes to different regions.

Many of the petroleum product pipelines in the country are between 15 to 20 years old, with some exposed due to soil erosion These aging pipelines are rusted and show signs of deterioration, making them susceptible to vandalism and corrosion.

In the light of these problems, the need to ascertain the significance of pipeline transport mode for the marketing or distribution of petroleum products in Nigeria cannot be overemphasized.

Objective of the Study

This study aims to examine the importance of pipeline transportation in the marketing of petroleum products in Southeast Nigeria The specific objectives include analyzing the efficiency of pipeline transport, assessing its impact on product distribution, and evaluating its role in enhancing market accessibility.

1 To determine the effect of the use of pipeline transport mode on the availability of petroleum products in South East, Nigeria.

2 To identify the major challenges confronting pipeline transportation of petroleum products

3 To determine the relative effect of pipeline vandalization; capacity underutilization; and PPMC management ulterior motive; on the scarcity of petroleum products in South-East Nigeria

4 To determine the strategies for effective management of petroleum products pipeline transportation.

Research Questions

1 What effect does the use of pipeline transportation mode have on the availability of petroleum products in South East Nigeria?

2 What major challenge(s) confront pipeline transportation of petroleum products to southeast Nigeria?

3 Do pipeline vandalisation, capacity underutilization and PPMC management ulterior motives have any significant relative effect on the scarcity of petroleum products in South East Nigeria?

4 What strategies can effectively aid management of pipeline transportation of petroleum products in South East Nigeria?

Research Hypotheses

1 Pipeline transportation mode does not have significant effect in the availability of petroleum products in Southeastern Nigeria.

2 Pipeline diameter and pipeline vandalisation are not the major challenges confronting petroleum products transportation through pipeline

3 Pipeline vandalisataion; capacity underutilization; and PPMC management ulterior motive do not have significant relative effect on the scarcity of petroleum products.

Replacing petroleum product pipelines with wider diameter alternatives and implementing remote control for transportation operations are ineffective strategies for managing pipeline transportation in Southeast Nigeria.

Significances of the Study

The findings and recommendations to be made in this study when implemented will benefit all Nigerians as well as the government.

This study's recommendations aim to significantly decrease pipeline vandalization in South East Nigeria, which will help eliminate fuel scarcity Consequently, Nigerians will enjoy easier access to affordable petroleum products at any time and place Additionally, the findings will contribute valuable insights for effective policy formulation and improved management of petroleum resources.

Scope of the Study

This study focuses on the significance of pipeline transportation in the marketing of petroleum products, specifically examining the operations of the Nigeria National Petroleum Corporation (NNPC) in its Enugu and Aba offices.

Limitations of the Study

In carrying out this research many factors served as constraints:

1 The limitation of the research scope to just pipeline transportation at its relevance to the marketing of petroleum products.

The primary limitation of this research study is the time constraint, which was significantly impacted by the overlapping demands of lectures, studies, and examinations.

Adeyinka, H (2000), Introduction to Commerce, Ibadan: Spotlight Books

Amodu (2000), The challenges of Pipeline Transportation, Unpublished project report, University of Benin.

Ike, S E (2009), Pipeline of Transportation Management for Nigeria

Schools, Lagos: Empire Publication ltd.

Kupuloyi A 0 (2000), Proposals for effective marketing of Petroleum

Product in Nigeria, Unpublished project report, University of Jos.

Ndukwe B (2000), Distribution Arrangement for Petroleum Products in

Olakumori K.0 (2000), Transportation management, Second Edition,

PPMC (1996), Investment and Business Guide, Lagos: public Affairs

Udensi I (1999), Petroleum Resources and Economic Development in

The United States saw the introduction of the first pump-operated petroleum pipelines in 1863, with a significant expansion of over 300,000 kilometers of pipeline network by 1960, reflecting the growing importance of petroleum as an energy source (Henry and Miller, 1977:131) In Nigeria, Mobil introduced petroleum pipelines in 1907, importing the "sunflower" brand of tinned household kerosene, primarily sold in major cities like Lagos and Ibadan The establishment of Nigeria's first petroleum refinery in Port Harcourt by British Petroleum and Shell in 1965 marked a pivotal development in the country's oil industry (PPMC 1996:10).

In response to the Oputa panel's recommendations in 1975, the Nigerian federal government assumed control of petroleum product imports through the Nigerian National Petroleum Corporation (NNPC) This initiative included the development of refineries, storage facilities, and pipelines to connect these centers Notably, the Warri refinery, with a capacity of 125,000 barrels per day, was commissioned in 1979, while the Old Port Harcourt refinery was expanded to 60,000 barrels per day to support self-sufficiency in refined petroleum The new Port Harcourt refinery, capable of processing 150,000 barrels per day, was completed in 1989, alongside the phase III pipeline and depot interlink project finalized in 1995 However, the absence of interlink facilities hindered consumers from fully benefiting from these developments, emphasizing the need for an enhanced pipeline system to improve the network's capacity, operational flexibility, and reliability.

The expansion of the pipeline network and the construction of storage facilities were designed to meet local demand for normal operations, ensuring a minimum supply for 45 days up until 2010 (Olakunori, 2000: 204).

The Nigerian petroleum products pipeline network is a comprehensive system classified into five main categories, all managed by the Nigerian National Petroleum Corporation (NNPC) through its subsidiary, the Pipeline and Production Marketing Company Limited (PPMC).

System 2A Wari – Benin – Ore – Mosimi

System 2B (a) Atlas cove- Mosimi- Ibadan- Ilorin

(b) Mosimi – Satellite (Ejigbo in Lagos)

(c) Mosimi – Ikeja System 2C Escravos — Wari- Kaduna (crude oil)

System 2CX (a) Enugu – Auchi (Interconnection)

System 2E Port Harcourt —Aba —Enugu- Makurdi

Source: Pipeline Interlink and Distribution of Refined Petroleum Products in Nigeria, Lagos: PPMC

Overview of Petroleum Marketing Industry in Nigeria - 16

Nigeria is rich in natural resources, with petroleum products being a key contributor to its economy Currently, Nigeria ranks as the ninth largest producer and sixth largest exporter of crude oil globally The petroleum sector is vital for the country, accounting for over 90% of foreign exchange earnings and providing numerous employment opportunities for Nigerians Furthermore, the substantial growth in oil revenues has profoundly impacted Nigeria's international relations, often placing the politics of oil at the forefront of its diplomatic history in recent decades.

Eromosele (1997) noted that after nearly fifty years of oil exploration, Nigeria's oil industry has reached a mature status compared to other sectors, achieving significant advancements in oil exploration and the export of crude oil However, the domestic management of petroleum resources faces numerous challenges, including product shortages, inefficient distribution, and fluctuating petrol prices These issues are exacerbated by ethnic tensions and civil unrest in the Niger Delta, leading to pipeline vandalism, disruptions in oil operations, and damage to lives and property.

Over the past twenty years, the petroleum industry has become crucial to Nigeria's economy, contributing approximately 78% to the Gross Domestic Product (GDP) and nearly 90% of the nation’s annual revenue and foreign exchange earnings, as reported by the National Bureau of Statistics in 2008.

In Table 1 a breakdown of the federally collected revenue from 1965 till

2007 shows that the oil sector maintained and continues to maintain its dominance accounting for over 90 percent of total revenue in some years.

Since 1980, the oil sector has consistently contributed over 70 percent to Nigeria's total government revenue, highlighting the critical role of petroleum resources in the country's economy.

The petroleum industry in Nigeria is categorized by its various actors and sectors It includes public organizations, such as the Nigerian National Petroleum Corporation (NNPC) and the Department of Petroleum Resources (DPR), which are government entities In addition to these public players, the industry also features a private sector comprising both indigenous and foreign companies.

The indigenous sector of Nigeria's petroleum industry is primarily made up of private independent marketers, a concept introduced in 1978 to enhance their participation According to Edoreh (1997), the number of independent marketers was limited to about 20 in 1979, but by 1993, this figure surged to 1,000 As of 2010, the Petroleum Product Pricing Regulatory Authority reported that the number of indigenous independent marketers had exceeded 7,948 This growth highlights their increasing role in Nigeria's economic development, as they accounted for less than half a percent of the total petroleum products marketed in the country in 1981.

Since 1998, major marketers have significantly increased their market share from 25 percent to nearly 40 percent of the total product volume in the country, according to NNPC (2010) This growth reflects their expanding presence and influence within the industry.

2218 while the independent markters have 7948 outlets The NNPC has

18 mega stations nationwide as at June, 2010 (See table 2).

These indigenous independent marketers are competing with the established big (foreign) multinational enterprises usually referred to as the major oil marketers comprising.

These six major oil marketers control about 60 percent of the market. There are two major classification of petroleum industry by sector These are the “Upstream” and Downstream sectors.

Activities in the Upstream sector include:

 Civil works such as site surveys and preparation of drilling locations

 Crude oil transportation and storage

The downstream sector of the petroleum industry which forms the basis of this study is characterized by such activities as

 Crude oil and gas conversion into refined and petrol chemical product and

 Transportation and distribution of refined products.

The downstream sector is increasingly being dominated by private entrepreneurs, particularly indigenous independent marketers, as the federal government promotes the distribution of petroleum products through private companies To facilitate this transition, oil marketing firms are selling portions of their shares to the public under the guidance of the Technical Committee on Privatization and Commercialization.

Over the past thirty years, the petroleum sector has played a crucial role in Nigeria's economy, contributing approximately 78% to the Gross Domestic Product and accounting for nearly 90% of the nation's total foreign exchange earnings.

In view of the strategic importance of the industry in the economy, in

1999 the Federal Government formulated strategic objectives for the effectiveness of the industry (according to the Nigerian National Petroleum Corporation Statistical Bulletin, 2006) as follows:

 Maintaining self sufficiency in refining

 Ensuring regular and uninterrupted domestic supply of petroleum products at reasonable price

 Establishing facilities and infrastructure for the

 Production of refined product targeted at the export market and support and support domestic petrochemicals

 Providing gainful employment and enabling Nigerians to acquire technical know – how in refining and distribution business.

Table 1: Revenue of Nigeria 1960-2011 (N million)

Year Total Revenue Oil Revenue Share of Oil

Share of Non-Oil Revenue %

Source: Central Bank of Nigeria: Annual Report and Statement of Accounts, Various Editions, National

Review of Statistics, Abuja, Annual Abstracts of Statistics, (2011)

The above listed strategy was to be the guiding principles for the effectiveness of the industry.

The government aimed to fulfill its aspirations for the downstream petroleum sub-sector through the dual strategies of deregulation and liberalization However, despite these efforts, the industry continues to face a range of persistent challenges.

 Scarcity of petroleum products leading to long queues, at the service station in some states and town of the country at regular intervals;

 Low capacity utilization and refining activities at the nation’s refineries;

 Rampart fire incidents as a result of mishandling products;

 Large scale smuggling due to unfavoruable economic product at home and higher borders prices with the neighbouring countries and

 Low investment opportunities in the sector

On August 14, 2000, the Federal Government of Nigeria established a special committee to review the supply and distribution of petroleum products Comprising members from diverse stakeholders and interest groups, the committee aimed to investigate the challenges facing the downstream petroleum sector and subsequently submitted its findings to the government for evaluation and approval.

On September 29, 2003, the Governing Board of the Petroleum Pricing Regulatory Authority (PPRA) declared the full deregulation of Nigeria's downstream petroleum sector, as noted by Olulueye (2004) This decision means that the Nigerian National Petroleum Company (NNPC) will now purchase crude oil, petrol, diesel, and kerosene at market prices.

Following the announcement, downstream operators significantly invested in the sector, leading to the construction and commissioning of jetties and depots, as well as the establishment of new service stations equipped with modern pumps This period also saw an expansion of trucking fleets, upgrades to health, safety, and environmental (HSE) equipment, and substantial investments in staff training.

Deregulation has been widely adopted by countries such as Peru, Argentina, Pakistan, Chile, the Philippines, Thailand, Mexico, Canada, Venezuela, Japan, and the USA to reduce public sector dominance and foster a liberalized market while ensuring sufficient product supply (Okafor, 2006) This complete deregulation has marked a significant turning point in the success of oil industry reforms in these nations If Nigeria were to follow this example and fully deregulate its downstream sector, it could lead to enhanced supply and distribution of petroleum products.

Eight major companies dominate the marketing sector, including two wholly indigenous firms, African Petroleum (AP) and Oando Plc The remaining six companies—National Oil and Chemical Marketing Plc, Total Plc, Agip Plc, Texaco Plc, and Elf—are jointly owned by Nigerian and foreign interests Excluding Elf, these seven companies achieved impressive combined turnovers of N7,289 billion, N9,132 billion, N16 billion, and N34 billion.

Domestic Refineries and Disparities Product Supply - 28

In May 1997, Business Africa Magazine raised a critical question regarding a country that produces 2 million barrels of oil daily yet faces severe fuel shortages that threaten to cripple its economy.

The underperformance of domestic refineries in Nigeria has led to fuel scarcity and highlighted deeper economic issues, as reported by Nwokeji (2007) The four subsidiaries of the Nigerian National Petroleum Corporation (NNPC), with a combined capacity of 445,000 barrels per day, have consistently operated below their potential since the mid-1980s, suffering from inefficiency and disrepair In 1997, Ministry of Finance officials determined that importing refined products was 20 percent cheaper than relying on the struggling refineries Furthermore, the Nigeria Extractive Industries Transparency Initiative (NEITI) Audit of 2006 revealed comprehensive performance data for the refineries from 1999 to 2004.

Table 2: Domestic Refining Designed Capacity and Overall Performance (1999-2004).

Installed Annual Designed Capacity % of Total

Between 1999 and 2004, the combined production percentages of refiners for PMS, DPK, and AGO were 31.4%, 13%, and 26.1% of their installed capacity, respectively.

According to Nwokeji (2007), the average daily refining capacity has been significantly impacted, as evidenced by the Warri refinery's inactivity during May-June 2006, alongside the Kaduna refinery's complete lack of production This failure of the Nigerian National Petroleum Corporation (NNPC) to refine its crude oil has led to increased market inefficiencies.

Consequently the corporation has increasingly market since the 1980s, and it uses the proceeds to import refined petroleum products.

To corroborate the persistent failing glory of the domestic refineries as given in the above analysis the Corporate Planning and Strategy

Division (CP&S), (2010) gives the below in the NNPC ASB 2010

LPG - Liquefied Petroleum Gas PMS - Premium Motor Spirit

HHK - House Hold Kerosene AGO - Automotive Gas Oil

Effort to revive the refineries have not yielded enduring results.

In response to the fuel shortages of 1974 and 1975, which were addressed by the construction of operational pipelines in 1988 and the establishment of refineries, the issue resurfaced in 1986 To combat fuel scarcity, the Abubakar government implemented significant reforms, including the abolition of NNPC’s importation monopoly in October (Nwokeji 2007).

In the 1999 budget, $39.7 million was allocated for the rehabilitation of four refineries, enabling overdue turnaround maintenance on the Kaduna refinery by French IOC Total since 1992 The privatization policy of the oil industry prioritized refineries, and while the subsequent Obasanjo administration invested heavily in their maintenance, the outcomes have been disappointing Over $1 billion was spent on repairs between 1999 and January 2007, yet the refineries have been described as a proverbial bottomless pit, highlighting the ongoing challenges in the sector.

The 2006 NEITI audit revealed that Nigeria's domestic demand for Premium Motor Spirit (PMS) has surged to a level that current refineries cannot satisfy, even at full capacity Consequently, it is evident that Nigeria will continue to rely on importing a substantial portion of its PMS for the foreseeable future, leading to inconsistent supply of petroleum products within the country.

Petroleum Pipeline Transportation in Nigeria

The peculiar features of petroleum pipeline transportation in Nigeria are examined under the following sub-headings:

• Relationship with other modes of transport

• Availability to the general public

• Carriage and track facilities and

In Nigeria, pipelines are owned by the federal government and managed by the Pipelines and Products Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC) The products transported through these pipelines are also owned by PPMC on behalf of the federal government This contrasts with the United States, where pipelines are predominantly owned by the private sector, and ownership of the pipelines and the transported products often differs.

RELATIONSHIP WITH OTHER MODES OF TRANSPORT

Pipeline transportation in Nigeria plays a crucial role in the oil industry, as it relies on various transportation methods The pipeline networks facilitate the collection of crude oil into storage tanks, from where it is transported to refineries After refining, pipelines then deliver the finished products to depots and end-users, including aviation clients at Ikeja Airport (Ibegbu, 1997:18).

AVIALABILITY OF PIPELINES TO THE GENERAL PUBLIC

In Nigeria, pipelines are primarily owned and operated by the federal government, specifically through the Nigeria National Petroleum Corporation (NNPC) and its subsidiary, the Pipelines and Products Marketing Company (PPMC), which limits public access This contrasts with the United States, where pipeline networks are predominantly owned by private entities, allowing users to also be the owners Consequently, the availability of pipelines in Nigeria is tightly controlled by the government for its exclusive use.

Pipelines transportation services typically have limited operators, with Nigeria having only one, the Pipelines and Products Marketing Company Ltd (PPMC), which exclusively manages the country's pipelines According to Olagunsoye (1997:43), the track facilities serve as the carriage facilities for pipeline transportation, allowing petroleum products to flow through the pipes with the assistance of powered pumps.

In pipeline transportation, the motive power remains stationary, unlike other transportation methods such as road, sea, and rail, where the motive power travels alongside the vehicle.

Pipeline Transportation and the Marketing of Petroleum

OF PETROLEUM PRODUCTS IN NIGERIA

Odoh (1998:8) reported that the use of pipelines for the transportation and marketing of petroleum under the following sub- headings:

Pipeline transportation is recognized as the most convenient method for transporting liquids and gases, significantly reducing wastage, contamination, accidents, and delays Economically, pipelines are the most cost-effective transportation option, as the operating and maintenance costs remain low once the infrastructure is established Additionally, pipeline transportation is particularly suitable for moving flowing materials, such as water and petroleum products, between fixed locations, effectively minimizing handling and operational costs.

Pipeline transportation is recognized for its superior safety, as noted by Olakunori (2000:212), significantly reducing accidents and damage to lives and property in Nigeria since the introduction of product pipelines for petroleum transport The environmental impact of pipeline systems is minimal, requiring less land than road or railway transport and generating low noise pollution, which contributes to its preference for transporting petroleum products (Okeke, 1990:21).

According to Ukiwe (1986:98), pipeline transportation stands out as the most automated method among contemporary transport options, utilizing microwave communication and facilitating easy terminal access This mode of transport eliminates issues such as traffic congestion, weather disruptions, and interchanges, ensuring that products consistently reach their destinations on schedule.

Impediments to Petroleum Pipeline Transportation in Nigeria 36

Olakunori (2000:212) enumerated some constraints to petroleum pipelines transportation in Nigeria.

Controlling wastage from damaged pipes poses significant challenges, leading to increased operational inefficiencies Additionally, issues such as sabotage and pilferage further complicate the management of pipeline systems Damage to pipelines can also result in pollution and potential explosions, posing serious safety risks Furthermore, the need for heavy fixed and specialized investments creates financial burdens, while usage and user restrictions limit operational flexibility.

Pipelines are typically unmanned, requiring periodic inspections to identify potential damage caused by accidents or sabotage The challenge lies in the time-consuming process of locating the damage, leading to significant wastage before repairs can be made As noted by Ndukwe (2000:9), this inefficiency complicates the transportation of petrol from refineries with surplus supply to those facing shortages Additionally, issues of sabotage and pilferage further exacerbate these operational challenges.

Vandalism and sabotage of petroleum pipelines in the country frequently lead to significant damage and product theft, particularly during times of acute shortages These actions not only cause substantial waste but also pose serious risks to human lives.

Between January and August 2000, Nigeria suffered a staggering loss of $16 billion due to intentional damage to its pipelines, as reported by PPMC This ongoing issue has become increasingly alarming for the federal government, highlighting the urgent need for effective solutions to combat pipeline vandalism and its associated environmental hazards, including pollution and explosions.

Pipeline damage, whether accidental or intentional, leads to significant pollution in surrounding areas, particularly when it involves refined product pipelines, often resulting in catastrophic fires, explosions, and loss of life and property To mitigate risks, pipelines are typically buried deep underground; however, this is not feasible in all locations, especially across rivers and deep gullies In oil-producing regions, frequent oil spills from pipelines have devastating effects on agriculture and aquatic life, contributing to the impoverishment of local communities, particularly in the Niger Delta These environmental disasters impose heavy financial burdens on oil companies, costing them billions of naira in cleanup efforts and compensation for damages.

Pipeline transportation necessitates significant investment in specialized infrastructure, which can be challenging for private enterprises in developing countries like Nigeria to secure Even the federal government struggles to gather the necessary funds for such investments, hindering the expansion of the pipeline network beyond its current capacity.

Pipeline transportation in Nigeria is exclusively utilized for petroleum products, limiting access for other industries The federal government, through the Petroleum Products Marketing Company (PPMC), is the sole owner and operator of the country's pipeline infrastructure This restricted usage hampers the broader economic benefits that could be realized from a more diversified pipeline network.

Petroleum Products Supply and Distribution Problems - 39

A critical analysis of the operational challenges in petroleum product distribution in Nigeria revealed that interconnecting all refineries is essential for resolving regular shortages For example, if the Warri refinery is undergoing maintenance, nearby depots can receive supplies directly from other refineries like Port Harcourt or Kaduna Additionally, disruptions in pipeline systems hinder product delivery to affected depots According to Amodu (2001:19), establishing pipelines linking the Port Harcourt or Warri refineries to the Kaduna zone would facilitate a more efficient supply of petrol, allowing other refineries to transport products to Kaduna storage depots, ensuring consistent availability across the region.

According to Ugbaja (1996), the pipelines connect each refinery to designated storage depots, but they are not linked to transfer products between refineries in need Eboh (2008) notes that the NNPC is implementing plans to interconnect the nation’s refineries and pipeline systems, known as the pipelines and depots projects phase three This initiative aims to address the isolation of Nigeria's pipeline and depot systems Ojogbo (2007) adds that the project will enhance the capacities of certain pipelines and depots to increase product delivery and storage volumes Additionally, phase three includes improving flow rates and enabling reversible flows through the installation of more powerful pumps, ensuring greater system flexibility.

The project aims to integrate the supply systems of all products within Nigeria's refinery pipeline and depot networks, as highlighted by Olajuwon (1998:4) Essien (2003:27) further emphasizes that this initiative will facilitate the efficient transfer of products from surplus regions to areas facing shortages Additionally, it will ensure the strategic stock of petroleum products is effectively maintained, enabling rapid replenishment across Nigeria's product depots.

Aluko and Ijere (1995:81) reveal that oil producing states in Nigeria are mainly faced with the following problems:

Oil exploration and production have led to significant harm to the lives, property, and ecosystems in oil-producing regions, primarily due to oil spills, gas flaring, and various forms of pollution Additionally, the oil market's inherent complexities and uncertainties pose challenges in ensuring the adequacy and stability of future oil revenue flows.

 The negative impact which privatization of the upstream sector of the Nigeria oil industry on the private sector operators in the industry who had adopted international standard of efficiency.

Prospects of Pipeline Transportation in Nigeria

The local consumption of petroleum products in the country has been on a steady rise, driven by industrial development and increasing affluence among the population This growing demand highlights the urgent need to expand the pipeline network As noted by Olakunori (2000:218), just a decade after the completion of phase III of its pipeline project, the PPMC is already experiencing shortages To effectively address this issue, it is essential to increase the number of depots and enhance the pipeline infrastructure, bringing products closer to consumers Ojogbo A.C (1999:34) emphasizes that the project aims to expand the capacities of existing pipelines and depots, thereby increasing their product delivery and storage capabilities.

Anyaigbo J.O (1998:59) stated that the objective of the project is to integrate the whole of the products supply systems in Nigeria refinery pipeline and depot systems.

Akinrinade (1999:88) added that the project will also enhance the movement of products from areas of surplus to others where deficit is experienced.

The Nigerian pipeline network will continue to focus exclusively on petroleum products, as the demand for pipeline transportation of other goods is minimal and economically unfeasible Currently, only the government has the capacity to secure land for pipeline installation, given that private landowners may be reluctant to sell or permit pipeline construction on their properties Under Nigerian land law, the government holds ultimate ownership of all land and can revoke certificates of occupancy for public use, facilitating land acquisition for government projects Consequently, pipeline transportation in Nigeria is likely to remain predominantly a government-led initiative for the foreseeable future.

Problems of Pipeline Vandalization/ Damage in Nigeria - 44

Pipelines are the most efficient means of transporting petroleum products, but they face significant challenges, particularly in certain environmental contexts Accidental damages to crude oil pipelines often lead to spills and environmental degradation, while theft from finished product pipelines by criminals has become increasingly common This criminal activity has resulted in devastating fire disasters, claiming numerous lives For instance, a fire explosion in July 2008 killed ten individuals attempting to steal premium motor spirit from a ruptured pipeline near Lagos Despite the dangers, incidents of theft continue to rise, with many individuals risking their lives to siphon fuel from damaged pipes.

Pipeline vandalization is primarily driven by soaring petroleum prices and ongoing product shortages, often exacerbated by negligence from those responsible for installation and maintenance To effectively address these issues, stringent penalties must be imposed on those accountable Implementing a comprehensive alarm system throughout the pipeline network is essential to promptly notify officials of any ruptures, damages, or unauthorized interference This system should alert personnel at pumping and control stations, indicating the exact location of incidents for swift response In addition to security teams, trained first responders should be on hand to manage initial situations until experts arrive to remediate spills and repair damaged infrastructure.

Remodeling the Management of Nigeria Oil Pipelines - 46

2.10 REMODELING THE MANAGEMENT OF NIGERIA OIL PIPELINES

Nigeria boasts an extensive infrastructure for transporting refined petroleum products, featuring a 15,120 km pipeline network that connects 21 oil depots and 19 pump stations Unfortunately, this network is not being utilized to its full economic potential due to persistent illegal tapping by oil thieves, sabotage, and ineffective management practices By reforming the management system, it is possible to address these challenges and significantly reduce illegal tapping and sabotage, ultimately enhancing the efficiency of the nation's refined petroleum products pipeline operations.

The Pipelines and Products Marketing Company (PPMC), which oversees Nigeria's refined petroleum products pipelines, is struggling to manage its extensive pipeline network due to its initial design not being suited for current challenges Economically, only pipeline companies that are structured to generate revenue can successfully operate in the demanding conditions faced by Nigeria’s pipeline transportation sector.

The PPMC's business activities are predominantly focused on petroleum products, which negatively impacts its pipeline transportation revenue, as it owns both the products and the pipelines In contrast, profit-oriented pipeline companies do not own the products they transport, allowing them to operate as intermediaries This model enables them to excel in pipeline management, enhancing security against sabotage, illegal tapping, and leak detection, while fostering continuous innovation Although achieving these goals can be challenging, profit-driven pipeline companies have demonstrated their feasibility According to the U.S Federal Energy Regulatory Commission's recent annual report, the net income of the top 19 U.S oil pipeline operators exceeded expectations in 2011, highlighting the potential for profitability in the pipeline sector.

To enhance the management system of Nigeria's refined petroleum pipelines, two effective strategies can be employed: leasing or conceding the pipelines to private companies, or establishing independent entities from the PPMC dedicated exclusively to pipeline operations A notable example of successful pipeline management is Russia's "Pipeline Troops," a specialized workforce trained in the construction and maintenance of pipelines.

The adoption of new management methods for Nigeria’s pipeline systems could significantly transform operations, but the feasibility of these recommendations remains in question The Petroleum Products Marketing Company (PPMC) has effectively organized its pipeline network into distinct systems, such as System 2B, which transports petroleum products from Atlas Cove to five depots in the southwest, and other systems linking the Port Harcourt and Kaduna refineries to various depots across the country By allowing companies to manage or lease these systems, there is potential for increased profitability and economic benefits, particularly through reduced transportation costs Currently, transporting a litre of petroleum from Lagos to Maiduguri costs N16.98, highlighting the need for more efficient logistics.

Efficient pipeline operations in Nigeria could lead to substantial reductions in transportation costs and foster competition within the industry The development of multi-product pipelines and new oil depots would enhance the value chain and create numerous job opportunities Additionally, the government would benefit from improved protection of the pipeline network, while alleviating the burden on roads caused by heavy trucks transporting petroleum products over long distances Furthermore, the Petroleum Equalization Fund (PEF), along with petroleum marketers and transporters, would also experience significant advantages.

Managing petroleum pipelines in Nigeria faces significant challenges such as illegal tapping, sabotage, right of way incursions, slow leak detection, and equipment failures in hard-to-reach areas However, advanced technologies like SCADA (Supervisory Control and Data Acquisition), Fiber Optic Cable (FOC), and Smart pigs offer effective solutions SCADA and FOC provide real-time alerts, enabling quick responses to protect extensive pipeline networks, even in remote locations where visual inspections are challenging These technologies can detect and locate interferences before damage occurs, while Smart pigs identify anomalies and mechanical issues within the pipelines To address right of way incursions, experts recommend engaging communities through sustainable corporate social responsibility (CSR) initiatives.

Globally, pipelines transportation is a money-spinning business Pipelines business has such potentials in Nigeria When the Petroleum Industry Bill

The 2012 law introduces provisions aimed at restructuring the management of Nigeria's refined petroleum products pipelines This includes options for leasing or conceding the country's pipeline network to private companies, as well as establishing independent businesses These changes are intended to serve as a significant catalyst for economic development in Nigeria.

Reducing the cost of petroleum product distribution in Nigeria will enhance the safety of national assets, the environment, and the rights of individuals This shift will transform the pipeline business into a profit-driven sector, fostering opportunities for expansion and technological advancement Additionally, it will promote local content while addressing critical issues such as illegal tapping and sabotage by oil thieves.

Summary of the Related Reviewed Literature

This chapter examined the theoretical aspects of the study, emphasizing that pipeline transportation of petroleum products began in the late 1970s following the recommendations of the Oputa panel in 1975 It identified pipelines as the most efficient and cost-effective method for transporting and marketing petroleum products, noting that once installed, the operating and maintenance costs remain low.

This review identifies key challenges facing pipeline transportation in Nigeria, including the difficulty in managing pollution and waste due to pipe damage, as well as issues related to sabotage and vandalism by criminals.

To effectively combat pipeline vandalization, this review recommends implementing alarm systems and enhancing military surveillance to ensure regular patrols of the pipelines.

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Introduction

This chapter outlines the methodologies utilized in this study, detailing the processes for determining sample size, identifying the population and sample size, and describing the data collection methods It also discusses the types of data gathered, the instruments used for data collection, and the validity and reliability of these instruments, concluding with an overview of the data analysis techniques employed.

Research Design

This study employs an exploratory quantitative research design to investigate the importance of pipeline transportation in the marketing of petroleum products in Southeast Nigeria The choice of this method is justified by the need to explore the significance of this transport mode in the region's petroleum market.

Area of the Study

This study was conducted at the NNPC depots located in Aba and Enugu, southeast Nigeria, which are connected by a network of pipelines from various pump stations across the country These depots are strategically positioned to serve the five southeastern states The rationale for selecting these depots for the study lies in their relevance to the research focus and the expertise of the workers, who have valuable insights into the effectiveness of pipeline transport for marketing petroleum products.

Source and Type of Data

The type of data used for this study was primary data It was collected/sourced from the staff of the two NNPC depots at Aba and Enugu

This study focuses on the management and junior staff of the NNPC depots in Aba and Enugu, comprising a total population of 474 individuals Specifically, the Enugu depot consists of 231 personnel, including 77 management staff and 154 junior staff, while the Aba depot has 243 employees, with 82 in management and 161 in junior positions.

The required sample size for this study was determined by means of Taro Yamane formula which states as thus:

Where n is the required sample size,

N is the population, e is the tolerable margin error at a desired confidence level (for this study, 95% was chosen)

Therefore, at 95% confidence level, where N = 474, e = 5%,

From the above computation, 217 was the sample size determined to be covered in the field survey.

Stratified sampling technique was further used to determine the actual sample to be drawn from each of the depots This involved the use of the below formula.

Where k is the actual sample to be drawn from each of the depots

A is the population of each of the depots

N is the total population n is the determined sample size.

Data collection in this study was through a structured questionnaire which was worded with close-ended questions and 5 point likert scales.

3.7 VALIDITY AND RELIABILITY OF THE DATA

A research instrument is considered valid when it accurately measures its intended variables To establish this validity, various methods can be employed, including content validity and face validity In this study, the researcher assessed the instrument's validity by conducting a pre-survey test and retest of the questionnaires on respondents for content validity, while also seeking evaluation from a research expert to ensure face validity.

Reliability of the Research Instrument

A reliable research instrument consistently produces similar responses from respondents when administered multiple times Similar to validity, the reliability of a research instrument can be assessed through various methods, including Test-Retest and Split-half approaches.

In this study, the researcher utilized the Test-Retest method, which involved administering a pretest of the research instrument, specifically the questionnaire, to respondents at two different times prior to the actual survey The responses from these pretest sessions were then analyzed using Pearson’s Product Moment Correlation (r) to assess the reliability of the data collected This correlation coefficient (r) quantitatively indicates the strength of reliability of the responses obtained from the instrument.

X = Responses got from the First Pretest exercise

Y = Responses got from second pretest exercise n = Number respondents covered in the test-retest exercise

To evaluate the instrument's reliability, the researcher randomly selected ten respondents from the described population group for a test-retest exercise, and their responses are detailed below.

X represents the first test responses obtained from the respondents;

Y shall represent the second test response obtained from the respondents;

The closer the value of to 1, the stronger the relationship between the two variables (vice – versa).

The correlation table indicates a strong positive correlation of 0.90 between the respondents' answers in the two independent tests (X and Y), suggesting that the research instrument is reliable and can consistently gather data when administered multiple times.

The study's data were analyzed using cross-tabulations and frequencies, with simple percentages employed to interpret the responses All hypotheses will be tested using SPSS software (version 15.0).

The first hypothesis was evaluated by integrating Spearman’s Ranked Correlation with a t-Test to determine the relationship between respondents' opinions on the suitability of pipeline transport for petroleum products Initially, Spearman’s Ranked Correlation assessed the relationship, followed by the t-Test to confirm the significance of the findings.

Reject H0 if |tcal > ttab| Otherwise, accept it

Hypothesis two was evaluated through the application of a univariate chi-square (X²) test Each challenge faced by petroleum products pipeline operations was analyzed using this statistical method to assess the data collected.

Reject H0 if |p < 0.05| Otherwise, accept it.

Hypothesis three was examined through multiple regression analysis, with the scarcity of petroleum products serving as the dependent variable The independent variables included pipeline vandalization, capacity underutilization, and the ulterior motives of PPMC management A model was created to illustrate the functional relationship between these variables.

Where: is Scarcity; is Pipeline Vandalisation; is Capacity Underutilisation; is PPMC management ulterior motive are determinants of

Reject H0 if |p < 0.05 given Fcal| Otherwise, accept it.

(iv) Hypothesis four was tested by using Kolmogorov Smirnov Z-Test.The normality of the distribution of the data collected on the strategies for effective management of pipeline transportation operation

CHAPTER FOUR DATA PRESENTATION, ANALYSIS AND INTERPRETATION 4.1 ANALYSIS OF ADMINISTERED AND RETURNED

Table 4.1: Copies of Questionnaire Distributed, Returned and Unreturned

Aba Depot % Enugu Depot % Total %

A total of 217 questionnaires were distributed to staff at the Aba and Enugu NNPC depots, with 209 responses received, resulting in a high response rate of 96.3% Specifically, 107 responses came from the Aba depot, while 102 were from the Enugu depot, leaving 8 questionnaires, or 3.7%, unreturned.

4.2 ANALYSIS OF RESPONDENTS’ DEMOGRAPHIC DATA

Respondents Aba Depot Enugu Depot Total Percentag e

On table 4.2 above, the gender distribution of the respondents is presented Out of the 209 respondents who responded favourably to the survey, 121(57.9%) are male while 88(42.1%) others are female.

Respondents Aba Depot Enugu Depot Total Percentage

The age distribution of the survey respondents reveals that the largest group, comprising 30.6%, falls within the 40-49 years age range, followed closely by 30.1% of respondents aged 30-39 years Additionally, 28.2% are between 20-29 years old, while 11.0% are aged 50-59 years This data indicates that the majority of participants in the survey are aged 40 to 49 years.

Respondents Aba Depot Enugu Depot Total Percentage

The data indicates that 34.0% of respondents, totaling 71 individuals, identified as single, while a significant 66.0% reported being married This suggests that the majority of participants in this study are married.

Respondents Educational Background Aba Depot Enugu Depot Total Percentage

Table 4.5 illustrates the educational qualifications of the study respondents, revealing that none possess an SSCE/GCE certificate Among them, 8.6% hold OND/NCE qualifications, 55.5% have BSc/HND degrees, and 35.9% are equipped with MSc/MBA degrees.

In short, majority of the respondents covered in the survey are graduates

4.3 ANALYSIS OF RESPONDENTS’ RESPONSES TO THE

QUESTIONNAIRE ITEMS SIGNIFICANCE OF PIPELINE MODE OF TRANSPORTATION FOR PETROLEUM PRODUCTS

Question 1: How would you describe the suitability of pipeline mode of transportation for petroleum products?

Table 4.6: Suitability of Pipeline Mode of Transportation for Petroleum Products

Respondents Aba Depot Enugu Depot Total Percentage

According to Table 4.6, the majority of respondents favor pipeline transportation for petroleum products, with 76 individuals (36.4%) rating it as very good and 109 (52.2%) considering it good Only 18 respondents (8.6%) were undecided, while a small minority of 6 (2.9%) rated it as bad Overall, the findings indicate a positive perception of pipeline transport for petroleum products.

Question 2: In view of your opinion in 1 above, would you agree that pipeline transport mode can supply petroleum products adequately more than trucks or any other modes?

Table 4.7: Adequacy of Supplies through Pipeline Transport Mode

Respondents Aba Depot Enugu Depot Total Percentage

Sample Size Determination

The required sample size for this study was determined by means of Taro Yamane formula which states as thus:

Where n is the required sample size,

N is the population, e is the tolerable margin error at a desired confidence level (for this study, 95% was chosen)

Therefore, at 95% confidence level, where N = 474, e = 5%,

From the above computation, 217 was the sample size determined to be covered in the field survey.

Stratified sampling technique was further used to determine the actual sample to be drawn from each of the depots This involved the use of the below formula.

Where k is the actual sample to be drawn from each of the depots

A is the population of each of the depots

N is the total population n is the determined sample size.

Data Collection Instrument

Data collection in this study was through a structured questionnaire which was worded with close-ended questions and 5 point likert scales.

Validity and Reliability of the Data Collection Instrument 60

A research instrument is considered valid if it accurately measures its intended construct To determine validity, various methods such as content validity and face validity can be employed In this study, the researcher assessed the instrument's validity by conducting a test-retest of the questionnaires with respondents to establish content validity, while face validity was evaluated through expert vetting of the instrument.

Reliability of the Research Instrument

A research instrument is considered reliable when it consistently produces similar responses from respondents across multiple administrations Similar to validity, reliability can be assessed through various methods, including Test-Retest and Split-half techniques.

In this study, the researcher utilized the Test-Retest method, which involved administering the questionnaire to respondents at two separate times prior to the main research survey The responses from these pretest sessions were analyzed using Pearson’s Product Moment Correlation (r) to assess the reliability of the data collected This method helps determine the strength of the instrument's reliability in capturing consistent responses.

X = Responses got from the First Pretest exercise

Y = Responses got from second pretest exercise n = Number respondents covered in the test-retest exercise

To evaluate the instrument's reliability, the researcher randomly selected ten respondents from the specified population group for a test-retest exercise, and their responses are detailed below.

X represents the first test responses obtained from the respondents;

Y shall represent the second test response obtained from the respondents;

The closer the value of to 1, the stronger the relationship between the two variables (vice – versa).

The correlation table indicates a strong positive correlation of 0.90 between the respondents' answers in the two independent tests (X and Y) This suggests that the research instrument is reliable and can consistently gather data when administered multiple times.

Method of Data Analysis

Analysis of Respondents’ Demographic Data

Respondents Aba Depot Enugu Depot Total Percentag e

On table 4.2 above, the gender distribution of the respondents is presented Out of the 209 respondents who responded favourably to the survey, 121(57.9%) are male while 88(42.1%) others are female.

Respondents Aba Depot Enugu Depot Total Percentage

The age distribution of the survey respondents reveals that the largest group, comprising 64 individuals (30.6%), falls within the 40-49 years age range, closely followed by 63 respondents (30.1%) aged 30-39 years Additionally, 59 respondents (28.2%) are aged 20-29 years, while 23 individuals (11.0%) are between 50-59 years old This data indicates that the majority of participants in the survey are aged 40-49 years.

Respondents Aba Depot Enugu Depot Total Percentage

The data indicates that 34.0% of respondents, totaling 71 individuals, identified as single, while a significant 66.0% reported being married This suggests that the majority of participants in this study are married.

Respondents Educational Background Aba Depot Enugu Depot Total Percentage

Table 4.5 illustrates the educational qualifications of the study respondents, revealing that none hold an SSCE/GCE certificate Among them, 8.6% (18 respondents) possess OND/NCE qualifications, 55.5% (116 respondents) have BSc/HND degrees, and 35.9% (75 respondents) are MSc/MBA holders.

In short, majority of the respondents covered in the survey are graduates.

Analysis of Respondents’ Responses to the

QUESTIONNAIRE ITEMS SIGNIFICANCE OF PIPELINE MODE OF TRANSPORTATION FOR PETROLEUM PRODUCTS

Question 1: How would you describe the suitability of pipeline mode of transportation for petroleum products?

Table 4.6: Suitability of Pipeline Mode of Transportation for Petroleum Products

Respondents Aba Depot Enugu Depot Total Percentage

According to the data presented in Table 4.6, a majority of respondents expressed a positive view on the suitability of pipeline transportation for petroleum products, with 36.4% rating it as very good and 52.2% as good Only 8.6% remained undecided, while 2.9% considered it bad Overall, the findings indicate that pipeline transportation is regarded as an effective method for transporting petroleum products.

Question 2: In view of your opinion in 1 above, would you agree that pipeline transport mode can supply petroleum products adequately more than trucks or any other modes?

Table 4.7: Adequacy of Supplies through Pipeline Transport Mode

Respondents Aba Depot Enugu Depot Total Percentage

According to Table 4.7, a significant majority of respondents expressed positive views on the adequacy of petroleum product supply via pipeline transport, with 40.2% strongly agreeing and 55.0% agreeing Only 4.8% were undecided, while none disagreed or strongly disagreed.

Question 3: How adequate have petroleum products been made available for masses’ consumption here in southeast?

Table 4.8: Availability of Petroleum Products for Masses’ Consumption in Southeast

Respondents Aba Depot Enugu Depot Total Percentage

Table 4.8 presents data on the adequacy of petroleum products supplied at southeast depots Among the respondents, 8.6% indicated that the petroleum products available for public consumption are very adequate, while 12.0% reported that they are adequate Additionally, 19.1% of respondents were undecided regarding the adequacy of these products.

70(33.5%) said it has been inadequate, and 56(26.8%) reported very inadequate.

Challenges Confronting Petroleum Products Pipeline Transportation in Southeast Nigeria

“Indicate your opinion from the following list of challenges confronting petroleum products pipeline transportation in southeast Nigeria”

Question 4: The diameter of the pipelines is not wide enough hence it limits the volume of petroleum products transported.

Table 4.9: Diameter of the Pipelines

Respondents Aba Depot Enugu Depot Total Percentage

The data in Table 4.9 highlights the challenges posed by pipeline diameters on the volume of petroleum products supplied at the Aba and Enugu depots Among the respondents, 19.6% strongly agreed with this issue, 34.4% agreed, while 31.1% were undecided Conversely, 6.2% disagreed, and 8.6% strongly disagreed.

Question 5: Vandalization of petroleum products pipelines is a challenging force to petroleum product transportation to Aba and Enugu Depot

Respondents Aba Depot Enugu Depot Total Percentage

The data in Table 4.10 highlights pipeline vandalization as a significant challenge to the transportation of petroleum products to the Aba and Enugu Depots A total of 129 respondents, representing 61.7%, strongly agreed with this assertion, while an additional 31 respondents also expressed their agreement Overall, the consensus indicates that pipeline vandalization poses a serious threat to the efficient transportation of petroleum products to southeastern depots.

Pipeline Vandalization, Capacity Underutilization and PPMC Management Ulterior Motives: Effects on Petroleum Products

Scarcity Question 6: How often are petroleum products experienced scarce or inadequate for masses’ consumption here in southeast?

Table 4.11: Scarcity of Petroleum Products

Respondents Aba Depot Enugu Depot Total Percentage

Table 4.11 illustrates the respondents' perceptions regarding the scarcity of petroleum products supplied to the Aba and Enugu depots for southeastern Nigeria A significant majority, 122 respondents (58.4%), indicated that they frequently encounter shortages, while 44 respondents (21.1%) noted that such shortages occur often Additionally, 28 respondents (13.4%) were uncertain, 6 respondents (2.9%) reported experiencing shortages seldom, and 9 respondents (4.3%) stated that they encounter shortages very seldom.

Question 7: How would you react to pipelines vandalization as being responsible to scarcity of petroleum products?

Respondents Aba Depot Enugu Depot Total Percentage

Table 4.12 highlights the potential impact of pipeline vandalization on the availability of petroleum products A significant 41.6% of respondents strongly agreed that it could lead to scarcity, while another 41.6% simply agreed Additionally, 13.4% of participants were undecided, and 2.4% disagreed with the notion that pipeline vandalization affects petroleum supply.

Question 8: How would you react to NNPC and PPMC’s production capacity underutilisation factor as being responsible for scarcity of petroleum products?

Respondents Aba Depot Enugu Depot Total Percentage

The data in Table 4.13 highlights the potential impact of capacity underutilization on the availability of petroleum products at the Aba and Enugu depots A significant 24.4% of respondents strongly believe that underutilization leads to scarcity, while 27.3% agree with this viewpoint Conversely, 21.5% of participants remain undecided, and 12.9% disagree, with 13.9% strongly opposing the notion that underutilization affects product scarcity.

Question 9: How you react to the ulterior motive of the management of

PPMC as a factor being responsible for the scarcity of petroleum products in southeast Nigeria.

Table 4.14: PPMC Management’s Ulterior Motive

Respondents Aba Depot Enugu Depot Total Percentage

Table 4.14 reveals insights into the management motives of the Pipelines and Products Marketing Company (PPMC) that may contribute to the scarcity of petroleum products at the Aba and Enugu depots The data indicates that 39.7% of respondents strongly agree with this notion, while 28.7% agree, 14.8% remain undecided, 10.0% disagree, and 6.7% strongly disagree.

Strategies for Effective Management of Pipelines Transportation Operations

Question 10: What would you feel to the replacement or repairing of all pipelines as a strategy for aiding effective management of pipeline transportation of petroleum products?

Respondents Aba Depot Enugu Depot Total Percentage

Table 4.15 reveals that a significant majority of respondents support the replacement or repair of pipelines as a crucial strategy for enhancing the management and transportation of petroleum products Specifically, 102 respondents (48.8%) strongly endorsed this approach, while 94 (45.0%) expressed agreement In contrast, 8 respondents (3.8%) were undecided, and 5 (2.4%) disagreed.

Question 11: How would you react to remotely control of pipeline petroleum products transportation with computer as an aid to effectively manage operations?

Table 4.16: Controlling Pipeline Transportation Operations Remotely

Respondents Aba Depot Enugu Depot Total Percentage

Table 4.16 illustrates the findings on the implementation of Remote Control in Pipeline Operations, highlighting its significance in enhancing the management and efficient transport of petroleum products through pipelines A substantial majority of respondents, 165 (78.9%), strongly endorsed this strategy, while 42 (20.1%) agreed, and only 2 (1.0%) were undecided, with no respondents expressing disagreement.

Test of Hyotheses

H0: Pipeline transportation mode does not have suitable effect on the availability of petroleum products in southeast Nigeria

H1: Pipeline transportation mode has significant suitable effect on the availability of petroleum products in southeast Nigeria

To evaluate the hypothesis, we analyzed the feedback from staff at the Aba and Enugu depots concerning the effectiveness of pipeline transportation for petroleum products The results of this analysis are presented in tables 4.6, 4.7, and 4.8.

The hypothesis will be evaluated using a combination of Spearman Ranked Correlation (rho) and t-Test Initially, the relationship between staff responses from two depots regarding the suitability of pipeline transport mode will be assessed with Spearman Ranked Correlation using SPSS version 15.0 Subsequently, the significance of these responses will be determined through a t-Test.

Reject H0 if |tcal > ttab| Otherwise, accept it.

Table 4.17: Spearman Ranked Correlation Result for Hypothesis One

Spearman's rho Aba Correlation Coefficient 1.000

** Correlation is significant at the 0.05 level (2-tailed).

The Spearman Ranked Correlation analysis of responses from the two groups of respondents indicates a significant correlation (rho = 943**, p < 0.05), demonstrating that both groups share similar opinions, as detailed in tables 4.6, 4.7, and 4.8.

Hence, to obtain the significance of the respondents’ view regarding the suitability of pipeline transport mode, the below t-Test formular would be used.

Based on the computed levels, the null hypothesis is rejected, leading to the acceptance of the alternate hypothesis, which asserts that pipeline transportation significantly impacts the effective transport of petroleum products.

H0: Pipeline diameter and pipeline vandalisation are not the major challenges confronting petroleum products transportation through pipeline

H2: Pipeline diameter and pipeline vandalisation are the major challenges confronting petroleum products transportation through pipeline.

To evaluate this hypothesis, the analysis will utilize the data presented in tables 4.9 and 4.10, focusing on two primary challenges: the size of the pipeline diameter and the issue of pipeline vandalization.

Univariate Chi-square test (X 2 ) was used to test the data collected on each of the tables 4.9 and 4.10 This was tested through SPSS version 15.0

Reject H0 if |p < 0.05| Otherwise, accept it.

Table 4.18: Univariate Chi-square (X 2 ) Test Result for Hypothesis

Respondents Aba Depot Enugu Depot Total Percentag e

Source: Data from Tables 4.9 and 4.10

The Univariate Chi-square (X²) test results indicate significant challenges in the transportation of petroleum products through pipelines, with values of X² = 68.105 and X² = 11.488 (p < 0.05) Consequently, the null hypothesis was rejected, supporting the alternate hypothesis that pipeline diameter and vandalism are the primary challenges faced in this sector.

H0: Pipeline vandalization, capacity underutilisation and PPMC management ulterior motive do not have significant relative effect on the scarcity of petroleum products.

H3: Pipeline vandalization, capacity underutilisation and PPMC management ulterior motive have significant relative effect on the scarcity of petroleum products.

To test this hypothesis, the data collected and analysed on tables 4.11,4.12, 4.13 and 4.14 would be used

Multiple Regression Analysis was used This was tested through SPSS version 15.0

A model, representing the functional relationship between the dependent variable ‘Scarcity’ and independent variables ‘Pipeline Vandalisation, Capacity Underutilisation, and PPMC management ulterior motive’ was used This include:

Where: is Scarcity; is Pipeline Vandalisation; is Capacity Underutilisation; is PPMC management ulterior motive are determinants of

Model R Square R Square the Estimate

Source: Regression Analysis Result, SPSS version 15.0

Squares Df Mean Square F Sig

Total 240.526 208 a Predictors: (Constant), PPMC Management Ulterior Motive , Pipeline Vandalisation, Capacity

Ulterior Motive 589 076 679 7.755 010 a Dependent Variable: Scarcity

The regression analysis results for hypothesis three, as shown in Tables 4.19, 4.20, and 4.21, reveal a significant relationship between the predictors—Pipeline vandalization, Capacity Underutilisation, and PPMC management ulterior motive—and the dependent variable, Scarcity, with an F-statistic of F(3, 205) = 323.004 (p < 0.05) This significance is further supported by the model fit indicated by the R-squared value.

The Normal P-P Plot of the Regression Standardised Residual, with a square value of 825, confirms the regression analysis results The graph illustrates that the expected and observed cumulative probabilities of the independent variables—pipeline vandalisation, capacity underutilisation, and PPMC management ulterior motives—significantly influence the dependent variable, scarcity, as they cluster closely around the line of best fit.

Normal P-P Plot of Regression Standardized

In addition, each of the predictors shows significant effect on the dependent variable at the following levels:

Where the y-intercept value ‘a’ is 0.839; the regression model is therefore

The analysis revealed a significant effect of pipeline vandalization, capacity underutilization, and PPMC management motives on the scarcity of petroleum products, as indicated by F(3, 205) = 323.004 and p < 0.05 Consequently, the null hypothesis was rejected in favor of the alternate hypothesis (H4).

Replacing existing petroleum product pipelines with wider diameter options and implementing remote control for transportation operations are ineffective strategies for improving the management of petroleum product transportation in Southeast Nigeria.

Replacing petroleum product pipelines with wider diameter ones and implementing remote control for transportation operations are effective strategies for enhancing the management of petroleum product transportation in Southeast Nigeria.

To test this hypothesis, the data collected on tables 4.15 and 4.16 were used respectively

The Kolmogorov Z-test was selected to assess the normality of respondents' answers concerning strategies for effectively managing pipeline transportation operations This test aimed to determine whether the distribution of the respondents' responses follows a normal distribution.

Reject H0 if |p < 0.05| Otherwise, accept it.

Table 4.22: Kolmogorov Z-Test Result for Hypothesis Four

Asymp Sig (2-tailed) 000 a Test distribution is Normal, b Calculated from data.

Table 4.22 illustrates that the distribution of respondents' feedback on strategies for effectively managing pipeline transportation operations is normal, with a Z value of 4.028 and a p-value of 0.000 Consequently, since p < 0.05, the null hypothesis is rejected in favor of the alternate hypothesis.

Replacing existing petroleum product pipelines with wider diameter alternatives and implementing remote control for transportation operations are effective strategies to enhance the management of petroleum product transportation in Southeast Nigeria.

CHAPTER FIVESUMMARY OF FINDINGS, CONCLUSIONS AND

Summary of Findings

This study, titled ‘Pipeline Transportation and its Significance to the Marketing of Petroleum Products in Nigeria,’ aimed to evaluate the effectiveness of pipeline transportation for petroleum products, identify challenges such as pipeline vandalization and capacity underutilization, and propose management strategies for southeast Nigeria Key findings indicate that pipeline transportation significantly enhances the availability of petroleum products in the region However, challenges like small pipeline diameter and vandalization pose major obstacles Furthermore, pipeline vandalization, underutilization, and management motives significantly contribute to the scarcity of petroleum products To improve management of pipeline transportation, recommendations include replacing existing pipelines with larger diameters and implementing remote control of transportation operations.

Conclusions

This study concludes that pipeline transport is the most effective method for transporting petroleum products It outperforms trucks in speed, capacity, and safety, making it an ideal choice for handling flammable substances like petrol motor spirit (PMS).

Recommendations

The following recommendations have been put together for use by users of research reports particularly research and government agencies as well as policy makers.

To ensure safety and efficiency in petroleum pipeline transportation, it is essential to implement remote control systems at pump stations This allows for the timely identification of any operational disruptions, significantly reducing the risk of fire outbreaks.

To enhance security measures, it is essential to deploy security guards along the pipeline routes This proactive approach will effectively deter any potential vandalism attempts in these critical areas.

To enhance efficiency in oil transportation, it is essential to replace existing pipelines with wider diameter alternatives, allowing for increased barrel capacity and faster delivery Additionally, the oil industry in Nigeria should prioritize the needs of local consumers, ensuring that production and supply align with the standards observed in developed nations.

(v) The monopoly of PPMC should be diffused with many private pipeline operators so that their ulterior motive will no longer have effect on the supply of petroleum products

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As a postgraduate student at the University of Nigeria, Enugu Campus, I am conducting research on the significance of pipeline transportation in the marketing of petroleum products in Southeast Nigeria This study is part of my requirements for earning a Master of Business Administration (MBA) in Marketing.

I hereby plead for your kind attention to complete the questionnaire attached with this letter.

Please, do so as objectively as you can All information you supply shall be treated with all confidentiality

QUESTIONNAIRE COMPLETED BY THE STAFF OF NNPC,

ABA AND ENUGU DEPOTS SECTION A: Respondents’ Demographic Data.

SECTION B: SIGNIFICANCE OF PIPELINE MODE OF

1 How would you describe the suitability of pipeline mode of transportation for petroleum products?

2 In view of your opinion in 1 above, would you agree that pipeline transport mode can supply petroleum products adequately more than trucks or any other modes.

3 How adequate have petroleum products been made available for masses consumption here in southeast.

PRODUCTS PIPELINE TRANSPORTATION IN SOUTHEAST, NIGERIA

1 The diameter of the pipelines is not wide enough hence it limits the volume of petroleum products transported.

2 Vandalization of petroleum products pipelines is a challenging force to petroleum product transportation to Aba and Enugu Depot

UNDERUTILIZATION AND PPMC MANAGEMENT ULTERIOR MOTIVE: EFFECTS ON PETROLEUM PRODUCTS SCARCITY

1 How often are petroleum products experience scarce or inadequate for masses’ consumption here in southeast.

2 How would you react to pipelines vandalization as being responsible to scarcity of petroleum products.