The Implications of Price Changes on Petroleum Products Distribution in Gwagwalada Abuja, Nigeria

Abstract

Nigeria is one of the leading oil producing country in the world, but despite these abundant natural resources. The country still suffers from massive shortage of premium motor spirit (PMS) and distribution to cater for the needs of the numerous users of its ends product.  This study investigates the implications of price changes on petroleum products distribution in Gwagwalada for a period of 12 years   (2000-2012).Questionnaire was used to collect primary data from ten wards within Gwagwalada Area Council which was used as study area. The statistical package for social sciences (SPSS) was used to analyze the raw data and determined whether to accept or reject a problem item as being a reflection of the thinking of the majority for taking a decision. The results from the study show that, there was a statistically significant effect of price changes of petroleum products distribution in Gwagwalada, that the price changes significantly cause fluctuation to supply and distribution of petroleum products, the price increases of PMS significantly lead to increase in cost of  distribution of other commodities including agricultural products and there exists statistical significant relationship between price increase and the development of “Black Market’’ and long queues at filling stations across Nigeria. The study recommends that government should strive to make the product available all times, monitor effectively the distribution channels to avoid disruption of distribution or scarcity, Consistency and efficiency of government pricing policy, the government to encourage more private participation and deregulation of the downstream sector and fight corruption as well as total market concept in the chain of petroleum product supply and distribution.

Keywords: Petroleum, Price, Products, Distribution, Premium Motor Spirit (PMS) Nigeria.