ASSESSMENT OF THE ENVIRONMENTAL COMPLIANCE OF RETAIL PETROL OUTLETS IN LOKOJA METROPOLIS, NIGERIA

ASSESSMENT OF THE ENVIRONMENTAL COMPLIANCE OF RETAIL PETROL OUTLETS IN LOKOJA METROPOLIS, NIGERIA

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ABSTRACT

Retail Petrol Outlets (RPOs), an integral part of the modern society has experienced a growth

in numbers with the increase in consumption of petroleum products in Nigeria. Despite their

importance, the location and operation of RPOs come with various implications on the local

environment. Thus, their location and operation are often guided by a set of environmental

laws and regulations. This study was aimed at assessing the environmental compliance of

RPOs to the Department of Petroleum Resources (DPR) guidelines in Lokoja Metropolis. To

obtain data for the study, a checklist based on the DPR guidelines was used to collect data on

the operational characteristics and the environmental compliance of the RPOs in the study

area. In addition, two sets of questionnaires were administered to managers and workers at the

selected RPOs to collect data on the factors militating against the environmental compliance

of RPOs in the study area. A reliability analysis of the questionnaires was performed and a

Cronbach‟s Alpha Value of 0.833 was obtained.    A cross tabulation analysis was also

performed to test the relationship between the factors militating against environmental

compliance of the RPOs in the study area. The results reveal that 71.7% of the RPOs were

under the ownership of independent marketers, and were unevenly distributed across various

routes in the study area. An assessment of the environmental compliance reveals that 98.3%

of the surveyed RPOs have concreted forecourt. However compliance was low in other

categories as only 18.3% of the RPOs had monitoring procedures to detect leakages from

underground storage tanks (USTs). An analysis of the data collected on the factors militating

against environmental compliance revealed that knowledge feasibility, capital adequacy and

technical feasibility among the RPOs was generally low as 37.4% of the respondents agreed

to a little extent that RPO employees are regularly educated on compliance to environmental

regulations. Also, 33.6% of the respondents agreed to a little extent that the management of

RPOs avails resources to implement required regulations. It was also revealed that the

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monitoring and enforcement practices of the relevant regulatory body were generally weak as

30.9% of the respondents completely disagreed that the regulatory body monitors

implementation of regulations. The Chi-Square test results obtained from the cross tabulation

analysis revealed a relationship between capital adequacy and technical feasibility, monitoring

and enforcement practices and knowledge feasibility, with the Cramer‟s V values indicating a

strong relationship between the identified factors. Amongst other recommendation provided

in this study, it is strongly recommended that education and sensitization of the employees at

the RPOs to relevant environmental laws and regulations be made a priority by DPR.

 CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Retail Petrol Outlets (RPOs) can be defined as the major facilities for dispensing petroleum

products to consumers for fuelling internal combustion engines. Most RPOs sell petrol and

diesel, some carry specialty fuels such as liquefied petroleum gas (LPG), natural gas,

hydrogen, biodiesel, kerosene, or butane while others add shops to their primary business.

They may also have a mechanic workshop, lube bays, car wash, mini marts and restaurants.

The petroleum products sold are usually dispensed from underground storage tanks (USTs)

through pumps and dispensers (Department of Petroleum Resources [DPR], 2002; Ayodele,

2011). According to Ehinomen and Adeleke (2012), RPOs are an integral part of the

petroleum industry that has occupied strategic importance in the Nigerian economy

accounting for as high as 78% of Gross Domestic product and up to 90 per cent of the

country‟s total annual revenue in the last two decades.

According to De Sousa (2015), because of the nature of the fuels that are stored and the

activities that take place within them, these outlets generally have great potentials for

degrading the environment where they are localised. The fuels stored and sold at RPOs are

known to cause high levels of air pollution from offloading and dispensing activities as well

as emissions from storage systems holding hydrocarbon. They are also important sources of

contamination of the soil and groundwater through leakages of USTs and have been subject of

numerous studies due to the complexity of the phenomenon and the interaction of these

pollutants with the soil and groundwater (Shukla, Pekny and Venkatasubramanian, 2011).

According to Oluleye (2004) the deregulation of the downstream petroleum industry in

Nigeria prompted massive investment in the sector, culminating in building of new RPOs

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with new pump deployment. There was also the expansion of trucking fleet, modernization of

HSE equipment and considerable investment in the training of staff. This development

brought an increased participation of the major and independent marketers in the downstream

sector of Nigeria. As a measure of the growing involvement of the indigenous petroleum

products marketers in the economic development process of Nigeria, it is interesting that in

1981, they accounted for less than 1% in terms of volume of petroleum products marketed in

Nigeria. By 1998, they had captured about 25 % of the market. Today, they account for over

40 % of the volume of products marketed in country (NNPC, 2010).

Business competition, legislation and composition in the retail business have changed a lot

over recent years. Businesses everywhere are now faced with new challenges like changes in

patterns of customer demand and technological innovations, shortfall in capital and cust


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