Downstream Petroleum Research Articles

Assessment of Factors Influencing Retail Consumers’ Choice of Fuel Service Stations in Lusaka, Zambia

Zambia's downstream petroleum retail sector has become fiercely competitive, compelling oil marketing companies (OMCs) to effectively understand and cater to consumer preferences. This research assessed the factors influencing retail consumers’ choice of fuel service stations in Lusaka, Zambia. The study adopted a positivist research philosophy and applied a quantitative approach, utilizing a cross-sectional descriptive research design. A structured questionnaire was used to collect data from 440 motorists determined by Yamane’s formula, within the central business of Lusaka town offering a diverse mix of fuel station brands and associated respondents. The primary data collected was analyzed using descriptive and inferential statistics with the aid of the Statistical Package for Social Sciences (SPSS) and Microsoft Excel. The study revealed that service quality, fuel station location, brand image, promotional programs, and non-fuel amenities significantly influence retail consumer choice of a fuel service station in Lusaka Zambia. Based on these findings, recommendations are made to OMCs to continuously improve all aspects of service quality, optimize fuel station location, revamp promotional strategies, strengthen brand image and reputation, enhance non-fuel amenities beyond mere fuel service, and continuously monitor and adapt strategies to improve their competitive edge.

Shapley value cost allocation model for multimodal freight transport carriers

The downstream petroleum products distribution is beset with significant challenges due to ageing pipeline infrastructure, pipeline vandalism and other logistical constraints. These challenges have given rise to soaring pump prices of premium motor spirit (PMS), product shortages and unavailability across some locations in Nigeria. Thus, deploying alternative transport modes for PMS distribution is explored to improve product distribution efficiency. The decision to combine inland waterway transport (instead of pipeline network) and road transport modes would activate the intrinsic advantages inherent in the multimodal transport system. However, the efficiency outcome of using multi-modes may be eroded if the multimodal transport operators compete (instead of collaborating) in service provisions. This research investigated cost efficiency in cooperative collaboration among multimodal transport carriers. We proposed collaboration among six multimodal transport operators. The aim of encouraging such a large-scale coalition (S) is the expectation that costs emanating from their joint operation would be reduced. We applied the Shapley value cost allocation method to distribute the costs of operation and profit to the collaborators. After the analysis, we observed that the unit cost for coalition S1 was reduced by N17.16 (5.10 %) million naira. Similarly, we observed respective reductions in unit costs for coalitions S2, …, S10. We observed a reduction in cost by N107.84 million naira, which represents a 6.15 % reduction in total unit cost for the multimodal transportation carriers. Thus, the observed cost efficiency represents savings due to distribution chain efficiency if the multimodal transport carriers collaborate to improve product availability. Working as a coalition would offset PMS pump price variation attributable to distribution chain inefficiency.

An analysis of the abolition of premium motor spirit (PMS) subsidies in Nigeria: a breach of social contract or climate change action?

The study examines the payment of fossil fuel subsidies made in Nigeria on petrol, with an analysis of the laws governing its payments. It explores the reasons for the removal of the petrol subsidy and examines the merits advocated by proponents of its elimination. Additionally, it investigates the diverse pricing methods employed for petroleum products. Employing a doctrinal legal research methodology, the article relies on the existing primary and secondary sources of laws to provide insights for the reforms. The study concludes with recommendations such as the implementation of a mixed economic system, reinforcement of trade laws, consumer protection and competition laws, improvement of transparency and accountability, promotion of investments in local refineries, adoption of cleaner alternative energy sources such as renewable energy sources by adopting the global energy transition agenda, and provision of palliatives. The findings unravel the complexities surrounding petrol subsidy payments which have occasioned corruption, rent-seeking activities and insufficient utilization of clean sources of energy. A significant gap exists in Nigeria’s energy sector compared to the selected case study countries. The study provides valuable insights for policymakers and stakeholders. The recommendations promote transparency, and accountability and will facilitate the necessary reforms for sustainable downstream petroleum industry and global energy security.

Human Factors Contributing to Accidents and Disasters in Road Transport of Petroleum Products in Kenya

Over the past few decades, Africa has witnessed enormous increase in the number of accidents take occur during road transport of petroleum products. Some of these accidents escalated into disasters because of release of products, with subsequent explosion and fire, resulting in several injuries and fatalities. With the Sendai Framework for Disaster Risk Reduction (DRR), the focus is on disaster risk reduction, rather than disaster response. This paper identifies human factors as a major cause of road transport accidents that lead to disasters when petroleum products are released. The study area was Kenya, but the findings are applicable across the continent. The Tripod Beta methodology, an incident investigation tool, was applied to analyse some of the disasters that had occurred in the downstream petroleum sub-sector in Kenya. The analysis identified root causes of accidents and highlighted the need to focus on tanker drivers as the key stakeholders for risk reduction. The root causes were applied in the development of the questionnaire that was used in a survey. The survey was carried out using random sampling, with a sample size of 391 tanker drivers. The study concluded that tanker drivers in the age group of 30-40 years, with 6-10 years’ driving experience and minimum educational level of secondary school, displayed the best performance in prevention of accidents and spills that could lead to disasters. Tanker drivers who meet these criteria should be the target of recruitment by transporters, followed by structured safety training, to achieve Goal Zero: no accident, no spill, and no disaster in the industry.

Forecasting Petroleum Products Consumption in the Chadian Road Transport Sector using Optimised Grey Models

This study aims to estimate the demand for petroleum products (PP) in the Chadian road sector by 2030 and to determine which of the two models used is the most efficient. The methodology is based on two optimised Grey models, namely: the Sequential-GM(1,N)-GA and NeuralODE-GM(1,1) models. These models reduce forecasting errors compared with the conventional Grey model. The forecasts confirm that both models are robust, with MAPEs of 1.16% and 2.5% respectively for gasoline and diesel obtained with the Sequential-GM(1,N)-GA, and 3.3% and 4.8% respectively for gasoline and diesel obtained with the NeuralODE-GM(1,1). We note that the Sequential-GM(1,N)-GA is more robust than NeuralODE-GM(1,1) with regard to MAPEs. The estimated consumption needs for gasoline and diesel in the road transport sector by 2030 are 294376818.5 and 381570061.5 litres respectively for the Sequential-GM(1,N)-GA and 264376818.5 and 375570061.5 litres for the NeuralODE-GM(1,1). Based on these results, securing the supply of PP in the road transport sector requires the development of the downstream petroleum sector. The development of alternative energies and the acquisition of hybrid vehicles. A policy encouraging mass transport in urban areas can considerably reduce energy consumption in this sector. This study adds to the literature through the simultaneous use of two new optimised grey models and their comparison in terms of predicting demand for PP in the Chadian road transport sector.

Transforming the Petroleum Industry through Catalytic Oxidation Reactions vis-à-vis Preceramic Polymer Catalyst Supports.

Preceramic polymers, for instance, are used in a variety of chemical processing industries and applications. In this contribution, we report on the catalytic oxidation reactions generated using preceramic polymer catalyst supports. Also, we report the full knowledge of the use of the remarkable catalytic oxidation, and the excellent structures of these preceramic polymer catalyst supports are revealed. This finding, on the other hand, focuses on the functionality and efficacy of future applications of catalytic oxidation of preceramic polymer nanocrystals for energy and environmental treatment. The aim is to design future implementations that can address potential environmental impacts associated with fuel production, particularly in downstream petroleum industry processes. As a result, these materials are being considered as viable candidates for environmentally friendly applications such as refined fuel production and related environmental treatment.

The Effect of Total Quality Management on Customer Satisfaction in the Downstream Petroleum Sector in Ghana

Despite the introduction of Total Quality Management (TQM), there is a general observation of customer dissatisfaction surrounding service provision by the companies in the downstream petroleum sector in Ghana. This research sought to assess the impact of TQM on customer satisfaction with regards to the downstream petroleum sector in Ghana. A sample size of 360 respondents, consisting of 290 customers, 60 staffs and 10 management staffs across different companies within Accra was used for the study. The study revealed that successful implementation of TQM has a major and significant impact on customers’ satisfaction. TQM relies of the principle of stakeholder participation and involvement. There was however a shortfall with this principle as it was identified that staff of companies within the industry did not adequately involve themselves in rolling out the TQM concept. The study recommends management of the company to ensure full participation of all. The study revealed that the successful implementation of TQM has a significant effect customer satisfaction. However, the principle of participation and involvement by staff in the quality management chain was found not to be encouraging as staffs have not been adequately involved in rolling out the TQM concept in their companies. The study concludes that management of the companies in the sector should ensure full participation of all employees in the implementation of TQM through effective communication mechanisms to integrate quality disciplines into the culture and quality service activities of the company. Keywords: Total Quality Management, Downstream petroleum sector, Customer service.

Economic Losses through Oil Theft in Nigeria: A 4-year (2019 – 2022) Analysis

The paper reviewed the economic implications of oil theft arising from vandalization of crude oil pipes, illegal petroleum refinery and bunkering in the Niger Delta region over a period of 4 years. The petroleum oil and gas industry being the highest government revenue generation in Nigeria for the sustenance of its economy became alarmed by the unprecedented rise in oil theft perpetrated by the activities of these illegal refineries (Artisanal refineries) dotted across the region with another group of criminals involved in outright theft of crude oil and selling to the international market. Data were collected from Nigerian middle and downstream petroleum regulatory authority and Nigerian upstream petroleum regulatory commission and processed. The outcome showed that within the period under review, Nigeria lost to oil theft an unprecedented oil revenue of $2.1b, $1.9b, $7.2b and $22.4b for 2019, 2020, 2021 and 2022 respectively. This great economic loss could have been used to sustain the dwindling economy. This article also made recommendations to mitigate this revenue loss.

The Analysis of Data Preparation to Validate Model Values of Information Technology

Currently, there are some methods of preparing data for validating an IT value model correctly. One challenge in applying data mining to validate model values is to convert data into an appropriate form for this activity. Data mining algorithms can then be applied using the prepared data. The adequacy of data preparation often determines whether this data mining is successful or not. This study aims at creating a method for preparing the data during validation. The basic method used for data preparation is the Returns to Scale (RTS) method because it is easy to use and can be combined with further validation results. This method was applied by employing two models: two-factor and three-factor models. Both models are then compared to see the difference between them. The developed model is then tested on Branchless Banking (BB) and Downstream Petroleum (DP) industries. The results show that the method is applicable to prepare the data for validation. In addition, the results also demonstrate that both industries, DP and BB, have different result on data preparation, meaning that DP and BB have different ITs. This research contributes not only to a technique of preparing data for validating an IT value model by the RTS method but also can be a basis to work for data validation because it can give a result with the behaviour of the industry.

Modelling the importance of collaborative culture and its dimensions for supply chain collaboration: a necessary condition analysis

Purpose This paper assumes necessity rather than sufficiency logic to model the relationship between collaborative culture and supply chain collaboration as triangular rather than linear. Specifically, this study aims to determine whether overall collaborative culture and its dimensions (i.e. collectivism, long-term orientation, power symmetry and uncertainty avoidance) are necessary for supply chain collaboration and the minimum levels of overall collaborative culture and its dimensions that are required for high levels of supply chain collaboration. Design/methodology/approach Based on the literature, collaborative culture and its four dimensions, namely, collectivism, long-term orientation, power symmetry and uncertainty avoidance, were modelled as conditions having supply chain collaboration as their outcome. The study used the necessary condition analysis to test the triangular relationships between the conditions and the outcome among a sample of firms (N = 166) in the downstream petroleum sector. Findings The results revealed that collaborative culture and its dimensions are necessary conditions for supply chain collaboration, and that high levels of collaboration are possible, although not guaranteed when at least a basic level of collaborative culture or its dimensions are present. Hence, different levels of supply chain collaboration require firms to have different levels of collectivism, long-term orientation, power symmetry and uncertainty avoidance. Thus, at 30% supply chain collaboration, only overall collaborative culture is necessary. Research limitations/implications A significant limitation of this research is that, although several antecedents of supply chain collaboration exist, this study explored only the cultural antecedents of supply chain collaboration. Practical implications The dimensions of collaborative culture are necessary but not sufficient for supply chain collaboration. Therefore, managers should adopt a holistic approach to investment in a collaborative culture, as an over-investment in any of the dimensions may not compensate for an under-investment in the others. Originality/value As one of the first studies to use necessity rather than sufficiency logic to test the relationship between collaborative culture and supply chain collaboration, this research unearthed the non-linear (triangular) relationship between the constructs. It contributes to understanding how collaborative culture and its dimensions serve as bottleneck conditions constraining supply chain collaboration.

A digital image colorimetry approach for identifying fuel types in downstream petroleum sector

A digital image colorimetry approach for identifying fuel types in downstream petroleum sector

Modelling the determinants of SME’s investment intention in the Ghanaian energy sector: the role of local content policy

PurposeThe purposes of this study are: to investigate how the dimensions of resource competitive strategies impact on small and medium enterprises’ (SMEs) intention to invest in Ghana’s downstream petroleum sector and to develop a model to explain the moderating role of local content policy on the relationship between competitive strategies and investment intention of SMEs. Focusing on the Ghanaian SMEs, quantitative research approach and survey questionnaire have been used. The research hypotheses have been tested using variance-based structural equation modeling technique.Design/methodology/approachSince the Ghanaian Parliament passed the Local Content and Local Participation Policy (LI.2204) into law in 2013, successive governments have strived to optimize oil and gas benefits and encouraged local participation, yet the actual impacts are mixed, ambiguous and inconsequential. This paper further argues that the extent to which the local content policy role moderates the relationship between firms’ internal resources (proxied as competitive strategies) and investment intention in the energy sector remains largely unexplored.FindingsThe results have shown that competitive strategies such as entrepreneurial competency, finance resources and technological usage have positive and significant effects on SME's investment intention. Again, local content policies exert significant moderating effect on SMEs’ investment intention.Practical implicationsThe policy implication of these results includes the need to strengthen regulatory capacity of the Petroleum Commission to enforce local content implementation in Ghana to enhance indigenous participation in the sector.Originality/valueTheoretically, using the resource-based view theory, this study has offered a robust predictability of SMEs investment’s determinants in an emerging economy.

Multimodal Fuzzy Downstream Petroleum Supply Chain: A Novel Pentagonal Fuzzy Optimization

The petroleum industry has a complex, inflexible and challenging supply chain (SC) that impacts both the national economy as well as people’s daily lives with a range of services, including transportation, heating, electricity, lubricants, as well as chemicals and petrochemicals. In the petroleum industry, supply chain management presents several challenges, especially in the logistics sector, that are not found in other industries. In addition, logistical challenges contribute significantly to the cost of oil. Uncertainty regarding customer demand and supply significantly affects SC networks. Hence, SC flexibility can be maintained by addressing uncertainty. On the other hand, in the real world, decision-making challenges are often ambiguous or vague. In some cases, measurements are incorrect owing to measurement errors, instrument faults, etc., which lead to a pentagonal fuzzy number (PFN) which is the extension of a fuzzy number. Therefore, it is necessary to develop quantitative models to optimize logistics operations and supply chain networks. This study proposed a linear programming model under an uncertain environment. The model minimizes the cost along the refineries, depots, multimode transport and demand nodes. Further developed pentagonal fuzzy optimization, an alternative approach is developed to solve the downstream supply chain using the mixed-integer linear programming (MILP) model to obtain a feasible solution to the fuzzy transportation cost problem. In this model, the coefficient of the transportation costs and parameters is assumed to be a pentagonal fuzzy number. Furthermore, defuzzification is performed using an accuracy function. To validate the model and technique and feasibility solution, an illustrative example of the oil and gas SC is considered, providing improved results compared with existing techniques and demonstrating its ability to benefit petroleum companies is the objective of this study.

Risk Management: A Qualitative Study of the Moroccan Downstream Petroleum Supply Chain

Risk Management: A Qualitative Study of the Moroccan Downstream Petroleum Supply Chain

The Potential of Sukuk for Financing Oil and Gas Sector in Nigeria

Nigeria has promising investment opportunities in the up and downstream sectors of the oil and gas industry that need financing. In the upstream, there are an estimated 37.2 Billion proven oil reserves and 182 Trillion cubic feet of natural gas. New investment opportunities are being developed, and individual and organizational investors need to finance their activities by purchasing drilling equipment and financing their infrastructures and storage facilities. Sukuk financing became a potential investment opportunity that could significantly address the upstream and downstream oil and gas sector and restore the glory of refineries in the country. There are currently three petroleum refineries in Nigeria with a stated capacity of 438 750. Perhaps the refineries are obsolete and bedeviled by poor management and turnaround maintenance due to the lack of funding. The study examines the potential of Sukuk financing oil and gas in the sector in Nigeria. The study employed Structural Equation Modeling to test the respondents' perspectives on the proposed model. Findings predict that the government may diversify and look for an alternative for funding that attracts more investors to participate in Sukuk financing. Future research is encouraged to use quantitative assessment methods to assess funding priorities between the Upstream, middle and downstream petroleum sectors.

Modeling the implications of sustainable supply chain practices on sustainable performance in Ghana’s petroleum industry: the role of stakeholders’ pressure

ABSTRACT The influx of Agenda 2030 for Sustainable Development and the COP 21 has necessitated the need for a paradigm shift in traditional consumption and production to reflect a balance between environmental safety, social justice and profitability. The Ghanaian Petroleum Industry is predominately fossil fuel–based with higher level of carbon and methane emissions. Ensuing from the Stakeholders’ and the Resource-Based View theories, this paper aims to develop a model to explain the relationship between sustainable supply chain management (SSCM) practices and sustainable performance (SP) by examining the extent to which pressure from stakeholders could strengthen the proposed model in the context of downstream petroleum supply chain. Variance-Based Partial Least Square method has been used to analyse a cross-sectional data from Oil Marketing companies in Ghana. Our results have revealed that SSCM practices such as environmental, economic, and social are positively related to SP. Moreover, stakeholder’s pressure positively and significantly relates to SP. Again, stakeholders’ pressure significantly moderate the relationships between environmental and social dimensions of SSCM practices and SP. By implications, there is an emergency of an SP model with enhanced predictability. Again, policymakers and advocates can achieve greater sustainability by maximising stakeholders’ pressure.

Quantum mechanics and molecular dynamics strategies to investigate self-aggregation of Quinolin-65

Asphaltene is the heaviest and most polar component of the crude oil. Asphaltene precipitation and deposition results in some adverse processes in both upstream and downstream petroleum industry such as formation of water-in-oil emulsions, wettability alteration of the reservoir rock, pore blockage leading to permeability impairment, blockage of transportation pipeline, and catalyst poisoning in refineries. Asphaltene self-aggregation plays a major role in all these operational difficulties. Although several studies have been carried out on asphaltene aggregation, there is limited scientific understanding of asphaltene self-aggregation at the microscopic level. In this study, Quinolin-65 molecule is considered as a model asphaltene structure. The effect of various factors contributing to self-aggregation of Quinolin-65 molecules including intermolecular interactions, temperature, pressure, solvent, and molecular structure are investigated using quantum mechanics analysis and molecular dynamics (MD) simulations. Results of reduced density gradient (RDG) analysis demonstrated that the strong van der Waals interaction between aromatic rings in two Quinolin-65 molecules is a critical factor in their dimerization and self-aggregation. Radial distribution function, potential of mean force, and mean square displacement are calculated using MD simulation. The Quinolin-65 aggregation tendency in the toluene medium is significantly decreased compared to that in the water and heptane media, due to the interactions between the Quinolin-65 molecules and toluene. According to the MD simulation results, the solubility parameter of the medium can affect the Quinolin-65 aggregation process. The stability of Quinolin-65 molecule in the medium is increased by increasing the temperature. Upon a change in the Quinolin-65 aggregation behavior, the free energy variation range with pressure and temperature is from −4.01 to −0.23 kjmol and −3.49 to −0.56 kjmol, respectively. This study provides new insights/findings to better understand the interaction force(s) between the Quinolin-65 molecules as well as the effect of different thermodynamic conditions on Quinolin-65 molecules self-aggregation at the molecular level. Moreover, this research work assesses the synergistic effects of influential parameters (e.g., thermodynamic conditions, solvent, and structure) on the Quinolin-65 self-aggregation behavior, which can help predict some serious flow assurance issues associated with the precipitation/deposition of asphaltene particles.

Modeling the impact of green supply chain practices on environmental performance: the mediating role of ecocentricity

PurposeThis study aims to examine the relationship between green supply chain management (Green SCM) practices and environmental performance, and develop an integrated model to explain the mediating role of ecocentricity on the relationship between Green SCM practices and environmental performance in the context of the Ghanaian downstream petroleum industry.Design/methodology/approachTo address the objectives of the study, a survey had been conducted among companies in the Ghanaian downstream value chain. The paper used the structural equation modeling approach and smart partial least squares (Smart-PLS) analytical tool.FindingsThe study revealed that Green SCM practices had a significant and positive relationship with supply chain ecocentricity and environmental performance. The study further revealed that supply chain ecocentricity significantly mediated the relationship between Green SCM practices and environmental performance.Practical implicationsThe study has developed a new integrated model to enhance oil and gas marketing and distribution company's adaptation and implementation of Green SCM practices.Originality/valueThe study had successfully applied the natural resource-based view and the stakeholder theory in the context of Ghana's downstream petroleum industry. Specifically, these theories had been integrated to form a new model to explain the relationship between Green SCM practices, supply chain ecocentricity and environmental performance in the context of Ghana's downstream petroleum industry. The newly developed integrated model has wider predictability as compared to the individual theories.

Strategies to Deregulate the Downstream Petroleum Sector of Pakistan

Oil products play a dynamic role in the overall energy domain because it supports country-wide transport, industries, and households. The oil market in most countries is deregulated and provides free access to every organization or independent player. Some of them have followed this policy from the very beginning, while others have followed the strategy regarding deregulation at a later stage. In Pakistan, there is a usual tug of war between Government authorities and Oil Marketing Companies (OMCs) concerning the decision of setting oil prices. This exploratory study aims to assess the prospects of deregulation of oil prices from the point of view of stockholders from the Oil Marketing Companies (OMCs). Data is gathered through interviews from the professional stakeholders who are working in the supply chain department in the downstream petroleum sector of Pakistan, and a thematic analysis method was used to analyze the data. As per the data obtained from the interviewees, there are both advantages and disadvantages of deregulation of petroleum. Advantages are like low prices of petroleum products, positive impact on the economy, opportunities for new entrants, and creation of new jobs. While the disadvantages are oligopoly created by the mafias, failure of the system, dumping of fuel, and increase in cross border smuggling. While the major barriers to deregulation are the Oil and Gas Regulatory Authority (OGRA) and political forces, and the facilitators for the deregulation are foreign direct investment and high tax collection of the Government. The deregulation must be done immediately to pass on the benefits of reduced and appropriate prices of petroleum products besides their availability in every city of the country. Government should also promote bulk import and storage of petroleum products so that the companies get possible economic ordering benefits of low prices.

Drivers of Customer Loyalty in the Downstream Petroleum Sub-Sector in Nigeria

The downstream petroleum sub-sector in Nigeria has remained highly competitive since the partial subsidy removal era. Operators now adopt various marketing efforts to attract and retain customers. While several models have been used to examine the drivers of customer loyalty in the petroleum industry, no study is known that applies the 7Ps model. This study, attempts to close this gap. Data was generated from petroleum products customers in the Southeast region of Nigeria, and analyzed with the SPSS 23.0 multiple regression analysis. Findings reveal that all the 7Ps variables – product, price, place, promotion, people, process and physical evidence are significant drivers of customer loyalty. The study recommends appropriate blending of the mix elements for more positive outcomes.