EFFECTS OF UNIFORM PRICING POLICY ON THE MARKETING OF PETROLEUM PRODUCTS IN NIGERIA

ABSTRACT

The aim of this study is to examine and determine the effects of uniform pricing policy on the marketing of petroleum products in Nigeria. Data were collected form primary and secondary data. The major data collection instrument is the questionnaire.

The data were presented in table as frequency distribution and analyzed with frequencies and percentage.  Having analyzed the data, the two funding are:

1.                 The existing pricing policy has resulted in uniform prices by the “Big 8” and different prices by independent marketers.

2.                 The effects of the uniform pricing include: shortage of supplies relative to demand, diversion, bunkering and hoarding of petroleum products.

The conclusion is guided that deregulation of the down stream sector will improve the pricing system.

                             TABLE OF CONTENT

Title page

Approval page

Dedication

Acknowledge

Table of content

List of table

Proposal

Abstract

CHAPTER ONE: INTRODUCTION

1.1            Background of the study

1.2            Statement of problem

1.3            Objectives of the study

1.4            Research questions

1.5            Significance of the study

1.6            Scope of limitations of the study

1.7            Definition of terms.

CHAPTER TWO: LITERATURE REVIEW

2.1            The meaning and concept of price

2.2            Determinants of price

2.3            Pricing goals and objectives

2.4            Flexibility in pricing

2.5            Pricing models

2.6            Pricing situation in Nigeria

2.7            Uniform pricing and marketing of petroleum product in Nigeria

CHAPTER THREE:  RESEARHC METHODOLOGY

3.1            Research design

3.2            Sources of data

3.3            Population

3.4            Sample size used

3.5            Validation of instrument

3.6            Data collection procedure

3.7            Method of data analysis

CHAPTER FOUR: DATE PRESENTATION AND ANALYSIS

5.1            Summary of findings

5.2            Conclusion

5.3            Recommendations

Bibliography

Appendix

LIST OF TABLE

4.1            Administration of questionnaires

4.2            Sex distribution of respondents

4.3            Age distribution of respondents

4.4            Marital distribution of respondents

4.5            Educational distribution of respondents.

4.6            Length of service

4.7            Petroleum product marketed by PPMC

4.8            Entities influencing the prices of petroleum products

4.9            Pricing policy for petroleum products

4.10       Response to uniform prices and efficiency in marketing petroleum products.

4.11       Effects of uniform pricing leading to hoarding

4.12       Effects of uniform pricing policy

4.13       Responses to protracted scarcity

4.14       Attributable to uniform pricing

4.15       Responses to deregulation and improvement of the pricing system.

                             CHAPTER ONE

                                  INTRODUCTION

1.1              BACKGROUND OF THE STUDY

Frequent charges in the prices of petroleum products, have a regular feature of the oil sector in Nigeria the price of petroleum products have been reviewed upward trice in Nigeria between 1999 and 2003 (Eze, 2003:7). Pricing of petroleum products had been the responsibility of the petroleum product pricing regulatory Agency (PPPRA) and, Nigerian National Petroleum deregulation of petroleum products prices.

The NNPC was established in 1977 to put the government in front seat in the oil industry.  Form them the government ceased to be a mere regulatory agency.  Through the NNPC, the government delved into exploration, drilling and marketing of petroleum products in Nigeria (Ugbaja 2001: 8).  To facilitate this, the pipeline and product marketing company (PPMC) and petroleum product pricing Regulatory Agency (PPPRA) were established to regulate the pricing, distributing and marketing of petroleum products in Nigeria.

Prior to the deregulation of petroleum product pricing in the PPPRA and the NNPC ensured uniform pricing for all petroleum products through out in Nigeria.  For instance in 1989 the Babangida administration through these agencies raised the pump price of fuel, one of the petroleum products to N6.00 per liter. This was also further raised to N13.00 per liter by the Abacha regime in 1996.

In 2001, the Obasanjo administration increased it to N19.00 and further to N26.00 in 2002.  In 2003, it was again raised form N26.00 to N34.00, and in 2004 currently was increased to N40.00 per liter and is still will be raised again (Ojo, 2003:18).

Uniformity in the pricing of petroleum products throughout the country had been ensured and sustained because of the control and the regulation of the industry by the government agencies the current proposals of the deregulation of the oil sector will not only bring about heterogeneity in the prices of these product but will also bring about wholesome activities in the marketing of these products (Nwala, 2003:9).