CHAPTER ONE

 INTRODUCTION

  1.1 BACKGROUND TO THE STUDY

The computerization of any data is of no doubt one of the safest reliable and easy access to all record keeping. Computers are helpful in preparing information about activities being carried out in an organization. The aim of any organization is always to meet the customers’ need and improved services. Most of these achievements cannot be possible without modern technologies like computers and other related devices. Computer programs are designed to save the user time and help in processing data easier and faster. Efficiency is another feature of the computer programs that enable an error free execution. For effective and efficient allocation and monitoring of petroleum product, there is a dire need for an electronic system for this quest. This study therefore focused on designing and developing Petroleum Allocation and Monitoring System that will remove some error faced by the manual system.

1.1.1 CONTEXTUAL BACKGROUND OF PETROLEUM DISTRIBUTION IN NIGERIA

The oil and gas sector in Nigeria is a dominant sector contributing high in the country’s economy. It is one of the major means of Nigeria’s internal revenue. Like other sectors of the major means of business, the marketing and distribution of petroleum products takes place on a vast, global scale. Every day, hundreds of millions of companies and individuals buy these products at a wholesale or direct from retail outlets. Refined products market is different from crude oil markets in a number of ways the scale is much smaller; a typical crude oil transaction involves 500,000 or even one million barrels of oil, while a typical refined product sale may involve only 5,000 to 10,000 bbls.

Distribution and marketing of fuels and lubricants is undertaking by international companies, which include Agip, Elf, Exxon, Oando, Texaco and Total. Distribution also involve three domestic companies – African Petroleum, BP, and Conoil PLC. Apart from these major marketers, there are 750 independent marketers who were registers and licensed by NNPC to market petroleum product across Nigeria. These independent marketers hold a share of approximately 36%. Although NNPC is not engaged directly in the marketing of refined products, it has substantial ownership in all of the marketing companies and therefor involved along the downstream chain (Ogu, A. 2011) the major marketers have a higher allocation of the petroleum products. They deal with all types of products. These companies are registered by NNPC and 40% owned by the government. They are credit-based marketers. The government has price control over the sale of the products by these types of marketers. The independent marketers are cash-based marketers. They deal with petroleum products consisting of Premium Motor Spirit (PMS). Dual Purpose Kerosene (DPK), and Automotive Gas Oil (AGO). These marketers are registered by NNPC. However due to the enactment of Petroleum Industrial Bill (PIB) in 2005 the government now controls the sale price of these marketers.

The operation that characterizes petroleum allocation in Gusau depot is still done using manual process. Now, daily lodgments and transactions are done in cashbooks file system. This has made it difficult for auditing and other decision-making process. It is against this background that this study centers in the design and development of an electronic system of petroleum allocation and monitoring.

1.2 STATEMENT OF THE PROBLEM

Petroleum product allocation is an effective way to ensuring that the end users get access to petroleum product without direct contact with the Nigeria National Petroleum Corporation (NNPC). It is a means by which major and independent marketers get these products through different chains of allocation. In an ideal situation, an electronic system is expected to be used in all organization for file storage, transaction and lodgments. Due to the great affordances of computers technology, many organizations buy in to actually participate in the adoption of electronic-based system in handling their business transactions. It is anticipated that the use of electronic systems in the managing of business transactions can increase productivity.

However, despite the affordances and flexibilities of the information and communication technology, the use of Pelectronic-based system in the allocation of petroleum products in Gusau deport is not yet witnessed. Now, almost if not all operations are done using a manual system (Research’s pilot study). This make transaction ineffective. The pilot study conducted by the researcher indicated that the deport prepares a single report for each marketer which makes the system more expensive. Report received from the depot depicted that auditors find it difficult to carry out their operations in kind of data processing technique. Furthermore, cost in terms of time and resource is another characteristic of the manual system. This becomes issue of concern to management staffs of the corporation.

1.3 PROJECT AIM 

This study was conducted with the intent of designing an automated system for the distribution and allocation of petroleum product in NNPC, Gusau depot towards ensuring higher productivity of the corporation.

1.4 PROJECT OBJECTIVES

1.           To design automated system that will correct error faced by the existing system

2.           To design an automated system that will track petroleum products allocated to major and independent marketers.

3.           To develop an automated system that will fix the problems encountered in fuel distribution

4.           To build a distributed system that will keep track of files across the web in case of disaster

1.5 SIGNIFICANCE OF THE STUDY

This system when completed will be expected to bridge the gaps faced by the existing system. It is expected that the system if adopted will improve productive and efficiency. Nigerian National Corporation will benefit from the system by spending less money required in audit and decision-making. Another significance of the study is that the marketers stand a chance of tracking the requests and keeping track of all purchases made.

1.6 SCOPE AND LIMITATION OF THE PROJECT

Scope: This study focused on the design of an automated system for the allocation and monitoring of petroleum products in NNPC, Gusau Depot. Additionally, the study covers major and independent marketers of refined petroleum products.

Limitations: One of the limitations of the study was its inability to cover all the depots of the Nigerian National Petroleum Corporation (NNPC). In addition to this, the proposed system capture online payment of allocated products.

1.7 DEFINATION OF TERMS

DEPOT: is an industrial facility for the storage of oil and/or petrochemical products and from which these products are usually transported to end users or further storage facilities.

PIPELINE: transport is the transportation of goods or material through a pipe.

Petroleum products: Petroleum is a naturally occurring, yellow-to-black liquid found in geological formations beneath the Earth's surface, which is commonly refined into various types of fuels.

Crude oil: Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials.

NNPC: Nigeria National Petroleum Corporation

(PMS): Premium Motor Spirit.

(DPK): Dual Purpose Kerosene

(AGO): Automotive Gas Oil

(PIB): Petroleum Industrial Bill

Research’s pilot study: A small study conducted in advance of a planned project, specifically to test aspects of the research design (such as stimulus material) and to allow necessary adjustment before final commitment to the design.

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Get This Project's Source Code: DESIGN AND IMPLEMENTATION PETROLEUM PRODUCT ALLOCATION AND MONITORING SYSTEM