INTRODUCTION
The Oil and Gas industry occupies
a prime position in the economy of several nation, it has attracted to itself
certain features which are rarely found in other sectors of any nation’s
economy. Its backward and forward integrative implications are reflected in the
development of other sectors and industries such as; petrochemicals,
agriculture, transportation and even human resources development
The oil and gas industry
constitute a service industry that can only be productive through the aid of
aggressive strategic marketing behavior. Marketing is important for the success
of any organization whether service or product-oriented. The indigenous
Nigerian Oil and Gas Marketing companies were not profoundly entrepreneurial at
the beginning for the following reasons: Lack of trained manpower, poor
infrastructural development, lack of adequate or sufficient capital base on the
part of the indigenous oil and gas marketing companies and intense competition
from superior foreign companies[1].
This study is intended to discuss
the strategies, legal framework and challenges of marketing in Nigeria oil and
gas sector.
MARKETING STRATEGIES IN THE NIGERIAN OIL AND GAS INDUSTRY
Marketing has been defined and conceptualized
in various ways. According to Webster dictionary it means;
‘’The
process or technique of promoting, selling and distributing a product or
service’’
An Author (Osuagwu) defines it
as;
‘’A
matrix of business activities organized to plan, produce, price, promote,
distribute and megamarket goods, services and ideas for the satisfaction of
relevant customers and clients’’
While, Marketing Strategy can be defined
as;
‘’A
consistent, appropriate and feasible set of principles through which a
particular company hopes to achieve its long run customer and profit objectives
in a particular competitive environment’’
Marketing is one of the
outstanding and imperative natural functions which help to overhaul
organizations to congregate their organizational challenges and to attain their
set objectives and intent. There are two concepts that form a good marketing
strategy choice;
a. Marketing
Strategy Assessment and
b. Execution.
We have plethora of marketing
strategies but the marketing strategies of petroleum products looks peculiar.
According to Ehinomen and Adeleke (2012) they highlighted some strategies
involved in petroleum marketing to include;
a. Price
reduction
b. Proper
distribution of products
c. Information
dissemination
d. Promotion
of product through sign post
e. Contact
of customers
f.
Matching of product with normal price limit
g. Negotiation
influence
h. Physical
distribution of product
i.
Financing of quantity of products and risk
taking.
REGULATORY FRAMEWORK GUIDING MARKETING IN NIGERIA OIL AND GAS
INDUSTRY
This means the necessary
legislative enactments, rules and regulations that serve as compulsory
supporting structure upon which petroleum marketing rests. These includes;
a. The
Petroleum Act
b. The
Petroleum Equalization Fund Act
c. Oil
Pipelines Act and
d. Directorate
of Petroleum Resources Regulation.
v The
Petroleum Act: The most significant part of the Act that has impact on
petroleum marketing is SECTION 4 which makes it an Offence for any
person to import, store, sell or distribute any petroleum product in Nigeria
without a license granted by the Minister.
In other words no activity in
respect to petroleum marketing will be complete without recourse to Section 4,
the sanction is spelt out in Section 4(6) of the Act; any person who does, without the
appropriate license, any act for which a license is required shall be guilty of
an offence and shall be liable on conviction to imprisonment for two years or a
fine of N2,000 (Two Thousand Naira Only) or both and in addition, the petroleum
product in respect of which the offence was committed will be confiscated by
the federal government.
However, this law does not apply
to;
a. The
storage, sale or distribution of not more than 500 liters of kerosene and such
other categories of petroleum products as may be exempted from the application
of sub section (1) of Section 4 by the Minister, by order published in the
federal gazette.
b. The
storage of petroleum products undertaken otherwise than in connection with the
importation, sale or distribution of petroleum products.
This is aimed at encouraging the
growth and development of small business and to make the products available in
far flung and remote places in Nigeria.
v The
Petroleum Equalization Fund Act: This Act establishes the Petroleum
Equalization Fund which is applied to the reimbursement of petroleum marketing
companies for any loss suffered or likely to be suffered by them arising from
the sale of petroleum products at uniform prices throughout Nigeria.
v The
Oil Pipelines Act: This
act makes provisions for licenses to be granted for the establishment and
maintenance of oil pipelines incidental and supplementary to oil fields and for
purposes ancillary to such pipelines.
v Department
of Petroleum Resources (DPR) Regulations: This department is a
statutory creation in the Nigerian Petroleum Corporation (NNPC) saddled with
the responsibility of laying down rules and regulations of the different
spheres of petroleum activity in Nigeria which includes;
a. Procedure
and conditions for granting approval for construction of petrol station
b. Guidelines
on importation of petroleum products into Nigeria
c. Guidelines
for the importation, storage, transportation and distribution of biofuel in
Nigeria and
d. Conditions
for granting approval for the operation of a petrol filling station.
CHALLENGES OF MARKETING IN NIGERIA OIL
AND GAS SECTOR
The challenges facing marketing
of petroleum products in Nigeria behooves on the callous operating business
environment. Amidst the challenges are;
a. Political
problems of some questionable interventions of the government in the operation
of the petroleum industry through NNPC
b. Volatile
changes in pump prices
c. Adulteration
of products
d. Fire
outbreak in refineries and fuel stations.
e. Distribution
problems with the resultant scarcity of the product supply.
CONCLUSION
The sensitivity of petroleum
resources is clearly reflected in the fact that it has remained the goose that
lays golden eggs for the Nigerian economy as well as the supreme foreign
exchange earner contributing over 80% of government revenues and helps the
development of Nigeria’s infrastructures and other industries[2].
The above discuss gives a detailed on strategic, legal framework and challenges
of marketing in Nigeria Oil and Gas Industry.
[1]
Strategic Marketing and Firms’ Performance: A study of Nigerian Oil and Gas
Industry access through http://www.upg-bulletin-se.ro/archive/2010-4/3.%20Akinyele.pdf
[2]
Strategic Marketing and Firm’s Performance: A study of Nigeria Oil and Gas
Industry accessed through hhttp://www.upg-bulletin-se.ro/archive/2010-4/3.%20Akinyele.pdf.
