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THE CHALLENGES OF PETROLEUM PRODUCTS DISTRIBUTION IN NIGERIA (HSE PERSPECTIVE)

  

PRESENTED BY ALHAJI AMINU ABDULKADIR (SARKI HURUMI ADAMAWA) NATIONAL PRESIDENT,

INDEPENDENT PETROLEUM MARKETERS ASSOCIATION OF NIGERIA (IPMAN)

 AT 

THE 15TH INTERNATIONAL HSE BIENNIAL CONFERENCE, TRANSCORP HILTON HOTEL ABUJA

   

5TH -7TH NOVEMBER, 2012.

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OVERVIEWNigeria oil and gas sector has predominantly dominated the pivot of Nigeria economy for decades. The operators are in the Downstream, Midstream and Upstream saddled with opportunities and challenges. The ongoing reform in the oil and gas sector through the proposed Petroleum Industrial Bill (PIB) will reshape the totality of Nigeria oil and gas sector for the benefit of Nigerians.

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HISTORICAL BACKGROUND OF NIGERIA DOWNSTREAM SECTOR

Nigeria discovered oil in 1958The Government built 4 refineries with combined installed capacity of 445,000 barrel per dayThe highest capacity production from these refineries is 70%, while in year 2000, it was as low as 19.9%.Major players in the downstream are IPMAN, Major Marketers and recently DAPPMA, and JEFFTON for storage operation.

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CONT. HISTORICAL BACKGROUND Downstream sector imported over 70% of PMS, AGO,

to feed the downstream market.37 Mega Stations, 12 Floating Satiations belong to

NNPC.5001Km of Pipeline (700 KM of this for crude oil

pipeline network).22 NNPC Storage depots with 2.66 billion litres

capacity (excluding private depots).Over 50 private depot owners exist in the

downstream.Margins are guaranteed to all players though not

sufficient to cover all operation cost with reasonable margin.

Uniform pricing nationwide through petroleum equalization fund scheme (AGO already deregulated).

Government provide subsidies through PPPRA (PSF) scheme.

 

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PRESENT REFINERIES CAPACITY STATUS PHRC - 210,00 Bpd WARC - 125,000 Bpd KRPC - 110,000 BpdTotal 445,000 Bpd 

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PROPOSED GREEN FILED REFINERIES  Lagos Axis - 300,000 ppd Lokoja Axis - 150,000 ppd South South Axis - 300,000 ppdIPMAN expect high level of seriousness in expediting the execution of these projects. 

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STORAGE AND RETAIL OUTLETS

(a)Retail outlet storage capacity = IPMAN 82%

= Major 18%(b) Retail outlets nationwide = IPMAN 86%

= Major 14%

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HISTORICAL BACKGROUND OF INDEPENDENT PETROLEUM MARKETERS ASSOCIATION OF NIGERIA (IPMAN)  The Federal Military Government Established

IPMAN in 1978.Objectively to encourage local participation in

the marketing, distribution and retailing of petroleum products.

Presently IPMAN have over 10,000 members with over 24,000 (86%) retail outlets in all the nooks and cronies of the country.

IPMAN members also have some retail outlets under the franchise of major marketers.

Investment of IPMAN members is in trillions of Naira

IPMAN is the next to the Federal Government in term of the largest employers of labour .

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CHALLENGES OF PETROLEUM PRODUCT DISTRIBUTION IN NIGERIA (HSE PERSPECTIVE) We shall look at the above topic under the following heading Pipeline vandalisation. Trucking of petroleum products from coastal

depots to hinterland. Scarcity of petroleum products in Nigeria.

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PIPELINE VANDALISATION CHALLENGES

Pipeline vandalisation/ruptured pipeline. Vessel programming leading to long stay of

vessel at discharge point. Thousand of lives have been lost to pipeline

vandalisation. The recent pipeline vandalisation happened

at Arepo in South West, Nigeria, which claimed 3 lives of NNPC Staff.

Fire outbreak at the vandalisation point.

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SOLUTIONSProcurement of patrol vans and management of

the right of ways (Row). Organization of seminars/enlightenment

campaign in communities along the right of ways for IPMAN Members, PTD members, Tanker owners and host communities.

Electronic surveillance of pipeline on the long run.

Tackling illegal marketer.Pipeline integrity assurance (relaying of

pipelines).Creation of anti vandalisation force (ARF) to

include all stakeholder. This force will work on intelligent gathering, right of way surveillance, partnering with host communities.

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TRUCKING CHALLENGES Over 70% of petroleum product movement in Nigeria

are by trucking. The bad and deplorable state of our road has caused

accidents resulting in loss of thousand of lives. Oil spillage arising from accident trucks have claimed

several lives as a result of fire from accident trucks. Spillage of petroleum products due to leakages,

accident, and operational malfunction are the primary source of pollution.

Air pollution emissions of volatile organic carbon from loading trucks, racks and spilled products.

Fire outbreaks at filling stations during discharge of Petroleum products to the under ground tanks particularly during Harmatan period.

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SOLUTIONRepair of the over 5001Kms

pipeline network to all the NNPC depots nationwide for easy, quicker and safer delivery of petroleum products to retail outlets nation wide.

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SCARCITY OF PETROLEUM PRODUCTS (CHALLENGES) Scarcity of petroleum products occurs

when supply and demand is not at equilibrium.

Many people chasing few products. Loss of lives and various health hazards

have occurred in the past and at present.

People sleeping in filling stations without consider the health and the risk.

Over zealousness of petroleum products customers to be served first among others has brought unjust death and injuries to people.

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SOLUTIONS Ensure adequate supply to the market

to withstand any demand pressure. Government should encourage private

participation in the petroleum products importation and distribution by intervention scheme to arrest any challenges (Finance, Logistic, Human created blockage etc). This will provide constant support to the NNPC at any point of shortfall in supply of petroleum products.

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Thanks.