Perazia Final

ASSESSMENT ON THE FACTORS AFFECTING
DOWNSTREAM SUPPLY CHAIN PERFORMANCE

OF PETROLEUM PRODUCTS IN TANZANIA
A CASE OF PUMA ENERGY TANZANIA LIMITED

ASSESSMENT ON THE FACTORS AFFECTING
DOWNSTREAM SUPPLY CHAIN PERFORMANCE
OF PETROLEUM PRODUCTS IN TANZANIA
A CASE OF PUMA ENERGY TANZANIA LIMITED
By
Perazia R. Magesa
A dissertation submitted in partial/fulfillment of the requirements for Award of

Master Degree of Science in Procurement and Supply Chain
Management (Msc. PSCM) of Mzumbe University
2019
CERTIFICATION
We, the undersigned, certify that we have read and hereby recommend for acceptance
by the Mzumbe University a dissertation entitled “Assessment On The Factors
Affecting Downstream Supply Chain Performance of Petroleum

Products In Tanzania” A Case of Puma Energy Tanzania Limited ” in
Partial/Fulfilment of the Requirements for Award of the Master’s Degree of
Procurement and Supply Chain Management of Mzumbe University.
Major Supervisor Dr. Paul M. Nsimbila
Internal examiner
Accepted for the board of
DEAN/DIRECTOR, FACULTY/ DIRECTORATE/SCHOOL/BOARD
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DECLARATION
AND
COPYRIGHT
I, Perazia R. Magesa, declare that this thesis is my own original work and that it has
not been presented and will not be presented to any other university for a similar or
any other degree award.
Signature: _________________
Date: _________________
This dissertation is a copyright material protected under the Berne Conversation, the
Copyright Act 1999 and other international and national enactments, in that behalf,
on intellectual property. It may not be produced by any means in full or in part,
except for short extracts in fair dealings, for research or private study, critical
scholarly review or discourse with an acknowledge, without the written permission of
Mzumbe University, on behalf of the author.
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ACKNOWLEGMENT
I would like to thank Almighty God for the guidance, favor and strength that have
given to me to accomplish this work successfully.
Secondly, I would like to express my thanks to PUMA Energy Tanzania Ltd
management and staff for their time and cooperation during this research study.
I would like also to thank my devoted supervisor Dr. Paul Nsimbila Kabelele for the
assistance, encouragement and enduring patience and timely input to this dissertation.
Finally, special thanks are extended to my beloved Father Mr. Robert for his
unfailing love and most never-ending support toward accomplishment of this study.
I would wish further to extend my sincere appreciation to my friends Rosemary
Mboga and Khamis Nassor together with all PSCM mates for their great input on the
completion of this dissertation. May the Lord bless them all.
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DEDICATION
I would like to dedicate this research work to my lovely family of Mr. & Mrs.
Magesa, my beloved brothers Frank and Fortunatus Magesa and my credible sisters
Acksa and Miriam Magesa for their encouragement on the completion of this report.
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LIST OF ABBREVIATIONS
B2B- Business to Business

E-Business- Electronic Business
EDI- Enterprise Data Interchange
EFPP- Electronic Fiscal Pump Printer
EHS- Environment, Health and Safety
EWURA- Energy and Water Utilities Regulatory Authority
ICT- Information and Communication Technology
IT- Information Technology
SC- Supply Chain
SCM- Supply Chain Management
SPSS- Statistical Package for Social Science
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ABSTRACT
This study was carried to assess factors affecting downstream supply chain
performance of petroleum products in Tanzania. Specifically, the study aimed at
determining the effect of Information and Communication Technology on Supply
Chain performance of Petroleum products, determining the extent of price control on
Supply Chain performance of the company, assessing the effect of value-added chain
on downstream Supply Chain performance and analyzing ways in which management
system affects Supply Chain performance of petroleum products in PUMA Energy
Limited.
Descriptive research design was employed by the researcher with sample size of 56
respondents which was selected by using simple random sampling and purposive
sampling technique. Primary and secondary data were collected by using
questionnaires and interview guide. Data collected were analyzed both qualitative
and quantitative by using Correlation analysis and regression analysis model with the
help of SPSS Software.
From the study the findings revealed that Supply Chain performance is affected by
Information and Communication Technology usage as the company uses the
platforms on provision of timely information on each element of Supply Chain within
the firm and operations. Also, the findings revealed that price control had affect
Supply Chain performance to a moderate extent since price caps set by regulator are
the ones the company considers on setting their forecasted retail prices. It was also
noted that the company had less power on supply chain management since there are
inadequate professional capacity on managing supply chain.
From this study, it was recommended that the company should invest on latest
technology to ensure efficiency and effective Supply Chain operations within the
company, the government should establish alternative ways of allowing petroleum
companies to source and import their own products from the suppliers of their own
choices and to manage their own prices. Also, company should establish strong
collaboration and networking platform that facilities may share real time information
between Supply Chain and eliminate bullwhip effects.
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TABLE OF CONTENTS
CERTIFICATION.......................................................................................................i
DECLARATION AND COPYRIGHT.....................................................................ii
ACKNOWLEGMENT..............................................................................................iii
DEDICATION...........................................................................................................iv
LIST OF ABBREVIATIONS....................................................................................v
ABSTRACT...............................................................................................................vi
LIST OF TABLES.....................................................................................................xi
LIST OF FIGURES..................................................................................................xii
CHAPTER ONE.........................................................................................................1
INTRODUCTION......................................................................................................1
1.1 Introduction....................................................................................................1
1.2 Background Information.................................................................................1
1.3 Statement of the Problem...............................................................................2
1.4 Objectives of the Study...................................................................................4
1.4.1 General objectives..........................................................................................4
1.4.2 Specific objectives..........................................................................................4
1.5 Research Questions.........................................................................................5
1.6 Scope of the Study..........................................................................................5
1.7 Significance of the Study................................................................................5
1.8 To the Organization........................................................................................5
1.8.1 To Academician..............................................................................................6
1.8.2 As a Researcher..............................................................................................6
1.9 Organization of the Study...............................................................................6
CHAPTER TWO........................................................................................................7
LITERATURE REVIEW..........................................................................................7
2.1 Introduction....................................................................................................7
2.2 Definition of Concepts and Terms..................................................................7
2.2.1 Supply Chain..................................................................................................7
2.2.2 Upstream supply chain...................................................................................7
2.2.3 Downstream Supply Chain.............................................................................7
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2.2.4 Logistics..........................................................................................................8
2.2.5 Distribution.....................................................................................................8
2.2.6 Information Communication technology (ICT).............................................8
2.2.7 Price control....................................................................................................9
2.2.8 Value adding supply chain...........................................................................12
2.3 Theoretical Review.......................................................................................12
2.3.1 Transaction Cost Theory..............................................................................12
2.3.2 Theory Neoclassical Economics and Rational Choice;................................13
2.3.2.1 Neoclassical economics................................................................................13
2.3.2.2 Rational choice theory..................................................................................13
2.3.3 Resources Based view..................................................................................13
2.3.4 Agency theory...............................................................................................14
2.3.5 Theory System..............................................................................................15
2.3.6 Theory of efficiency.....................................................................................15
2.4 Empirical Review.........................................................................................16
2.4.1 Introduction..................................................................................................16
2.4.2 Worldwide Context.......................................................................................16
2.4.3 Africa Context..............................................................................................17
2.4.4 Tanzania Context..........................................................................................20
2.4.5 Summary and knowledge gap.......................................................................20
2.5 Conceptual Framework.................................................................................23
CHAPTER THREE..................................................................................................24
RESEARCH METHODOLOGY............................................................................24
3.1 Introduction..................................................................................................24
3.2 Type of the study..........................................................................................24
3.3 Study area.....................................................................................................24
3.4 Study population...........................................................................................25
3.5 Unit of analysis.............................................................................................25
3.6 Variables and their measurement.................................................................25
3.7 Sample size and sampling techniques..........................................................26
3.8 Sample size...................................................................................................26
3.9 Sampling Techniques...................................................................................27
3.10 Types and sources of data.............................................................................27
3.10.1 Primary data..................................................................................................27
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3.10.2 Secondary Data.............................................................................................28
3.11 Data collection methods...............................................................................28
3.11.1 Questionnaire................................................................................................28
3.11.2 Interview.......................................................................................................29
3.11.3 Documentary review.....................................................................................29
3.12 Validity and Reliability Issues......................................................................29
3.12.1 Reliability of data.........................................................................................29
3.12.2 Validity of Data............................................................................................29
3.13 Data analysis methods..................................................................................30
3.13.1 Qualitative Analysis.....................................................................................30
3.13.2 Quantitative Analysis...................................................................................30
CHAPTER FOUR.....................................................................................................31
PRESENTATION OF THE FINDINGS................................................................31
4.1 Introduction..................................................................................................31
4.2 Respondent general information...................................................................31
4.2.1 Age analysis..................................................................................................31
4.2.2 Gender analysis.............................................................................................32
4.2.3 Respondents Education level........................................................................33
4.2.4 Respondents working experience.................................................................34
4.2.5 Distribution of respondents by department..................................................35
4.3 Data analysis in relation to specific objectives.............................................36
4.3.1 The effects of ICT on SC performance of petroleum products....................36
4.3.2 To determine the extent of price control on SC performance of petroleum
products........................................................................................................38
4.3.3 To assess the effect of value added on downstream SC performance..........39
4.3.3.1 Outsourcing non-core activities....................................................................39
4.3.3.2 Focus on Green environment and social responsibilities.............................40
4.3.3.3 Market location.............................................................................................41
4.3.3.4 Shorter lead time adds value on SC performance.........................................42
4.3.4 Management system of the company and supply chain performance of
petroleum products.......................................................................................43
4.3.4.1 Adequate expertise.......................................................................................44
4.3.4.2 Effective allocation of resources..................................................................44
4.3.4.3 Supply chain coordination............................................................................45
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CHAPTER FIVE......................................................................................................46
DISCUSSION OF THE FINDINGS.......................................................................46
5.1 Introductions.................................................................................................46
5.2 The effects of ICT on SC performance of petroleum products....................46
5.3 Determination of the extent of price control on SC performance of
5.4 Value added on downstream SC performance.............................................48
5.5 Management system of the company...........................................................50
CHAPTER SIX.........................................................................................................51
SUMMARY, CONCLUSION AND RECOMENDATION..................................51
6.1 Introduction..................................................................................................51
6.2 Summary of the study findings.....................................................................51
6.3 Conclusion....................................................................................................52
6.3.2 The effect of ICT on supply chain performance of petroleum products......52
6.3.2 The extent of Price Control on supply chain performance of the company. 52
6.3.3 The effect of Value added on downstream supply chain performance of
6.3.4 The Effect of Management system on downstream supply chain of the
company........................................................................................................53
6.5 Recommendation..........................................................................................54
6.6 Limitation of the study and suggestion for further study.............................54
REFERENCES.........................................................................................................56
APPENDICES...........................................................................................................62
RESEARCH QUESTIONNAIRE..............................................................................62
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LIST OF TABLES
Table 3.1: Sample composition..................................................................................26

Table 4.1: Age of Respondents...................................................................................32
Table 4.2: Gender respondents...................................................................................33
Table 4.3: Education level..........................................................................................34
Table 4.4: Working experience...................................................................................35
Table 4.5: Occupation by department.........................................................................35
Table 4.6: Model summary.........................................................................................36
Table 4.7: Coefficient results......................................................................................37
Table 4.8: Correlation analysis between ICT and SC performance...........................38
Table 4.9: Model summary.........................................................................................38
Table 4.10: Coefficients results..................................................................................39
Table 4.11: Outsourcing non-core activities...............................................................40
Table 4.12: Green supply chain Environment............................................................41
Table 4.13 Supply Chain Coordination......................................................................42
Table 4.14 Shorter lead time.......................................................................................43
Table 4.15 Adequate expertise....................................................................................44
Table 4.16 Effective allocation of resources..............................................................44
Table 4.17 Supply chain coordination........................................................................45
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LIST OF FIGURES
Figure 2.1: Conceptual Framework............................................................................23
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CHAPTER ONE
INTRODUCTION
1.1 Introduction
This chapter contains background information, statement of the problem, research

objectives divided into general objective and specific objectives, research questions
which also divided into general and specific questions, scope of the study, and
significance of the study as well as the limitation of the study.
1.2 Background Information
Before 1950s, supply chain was thought of military terms. It was dealing with
procurement, /maintenance and transportation of military facilities, material and
personnel. Later on, few authors began to explore significance of supply chain by
trading one cost for another such as transport cost with inventory cost (Wang 2016).
The authors of academic books increases their focus on supply chain studies,
business managers also increases attention on supply chain as due to the fact that
supply chain functions often represent almost half of the total marketing costs of
product (Wang & Wang, 2016).
In the 1980s, many records show how many companies made large investment to
modernize their supply chains in order to improve their internal productivities as well
as improving customer satisfaction. As Christopher (1998) states, “it is not actually
individual companies that compete with each other nowadays; rather, the competition
is between rival supply chains”. The company’s supply chains that add the most
value for customers such as shorter lead time with the lowest cost in chain make up
the winning network (Beatrice, n.d.).
After the 1980s, Supply chain and logistics has grown through computer technology,
the internet use has increased rapidly and change people’s perception of
communication.
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Globalization has greatly changed the way things were lately, the world of logistics
has greatly improved due to improvement of modern information technology,
transportation technology and the increase of ecological awareness. The technology
has brought about the easier way of performing supply chain and logistics activities
such as manufacturing, distribution communication networks, transportation and
warehousing through integration of upstream and downstream. Due to the
improvement large Supply Chain management systems are developing to global
logistics networks (Gunasekaran, Patel, & McGaughey, 2004).
Recently supply chain has become a hot topic in industrial, government and academic
areas. As a competitive edge to more businesses today, manufacturing firms have to
assess their actions and angles to center their sourcing routine to lower cost suppliers
in the market. The Firms have to source materials from right and lower source as to
reduce cost of manufacturing and maximizes profit as well as satisfying the users.
Due to competition in supply chain actors and the act of cutting down costs large
companies have to understand the benefits of outsourcing in breaking down cost and
maximizing expected profits (Resse 2005). Chrisopher and Towill (2000) opined,
competition plays a role in firms which forms a basis to determine margins of
operations of such a firm in the long-term, it predicts the ability of the firm to
compete Globally consequently, firms need to look for success alignment of business
processes probably through business process re- engineering (Resse 2005).
1.3 Statement of the Problem
Petroleum industry is one of the greatest industries that touches day to day life of
individuals, as it is very complex in nature that take in transportation of petroleum
products, heating, lubricant and petrochemicals products. Petroleum industry is
complex due to the high cost of its operations, it is said that the production of
petroleum products is less than that of its transportation (Kojima 2012).
The supply chain network in the oil industry involve shipping via vessel, pipeline and
oil tankers. The pipeline way may run across different countries to supply oil. The
methods of supplying oil can be used to supply raw oils thus crude from wellhead to
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refinery for further processing. The supply chain methods also can be used to
transport semi processing materials between multi-site refining facilities, and from
there of finished products can be transported from products storage tanks to
distribution centers including retail stations and finally to consumers (Chima 2007).
In developing countries like East African countries they undergo downstream supply
chain in order to save the community with oil gas and energy in general. Each
government import the overall quantity of petroleum to be supplied to different
petroleum industries for distribution and value additions. In case of any disruption
from global supply chain can cause adversarial impacts in efficiency operations,
quality maintenance, returns on investment and customer satisfaction (Chima 2007).
Some of the studies have been conducted on the factors effecting supply chain
management on petroleum industries and some based on single factor that affects
supply chain performance. For example, a study conducted by (Osoro, Muturi, &
Ngugi, 2015) on their study concerned with the Econometric Data Analysis Affecting
Performance of Supply Chain Systems in Kenya, their purpose was to analyze the
effect of crude oil price as one of determinants of supply chain system in Kenya. On
their study they based only on determining crude oil effect on flow of information,
material and funds within supply chain system. Although there some significant of
supply chain in petroleum industries on the other side the adverse events may occur
due to uncertainty in demand and supply of petroleum, market instability as well as
political influence (Osoro et al., 2015).
Regardless of the significance of the petroleum industry in daily lifecycle of

individual and the operational challenges it experiences, the topic of factors affecting
supply chain performance of petroleum products has gained very little consideration
in operations and literatures of supply chain management. Even though some of the
researchers argue on the factors affecting supply chain performance that can be found
in literature demonstrated by abovementioned studies, the basis of most of the
literature is in single organizations and in developed countries.
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By applying the experiences obtained from some literatures, the studies differ from
country to country. Thus the factors that affect supply chain performance in
developing countries differ from those of developed countries due to differences in
economical, geographical, political and technological factors. Therefore; the study
sought to assess the factors affecting downstream supply chain performance of
petroleum products in Tanzania through determining the effect of ICT, price control,
value added chain and the effect of management system. This is because the
organization need to be aware and consider the factors affecting downstream supply
chain performance in order to attain efficient and effective downstream supply chain
performance of petroleum product.
1.4 Objectives of the Study
1.4.1 General objectives

The main objective of this study was to assess the factors affecting downstream
supply chain performance of petroleum products.
1.4.2 Specific objectives

1. To determine the effect of ICT on supply chain performance of Petroleum
products in PUMA Energy.
2. To determine the extent of price control on supply chain performance of the
company.
3. To assess the effect of value-added chain on downstream supply chain
performance.
4. To analyze the effect of management system on downstream supply chain
performance of petroleum products.
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1.5 Research Questions
1. What is the effect of ICT on supply chain performance of petroleum in

PUMA Energy?
2. To what extent does price control affect supply performance of petroleum
products?
3. To what extend value added in Supply chain affect supply chain performance
of petroleum products?
4. How management systems of the company affect petroleum supply chain
performance?
1.6 Scope of the Study
This study focused on the factors affecting supply chain performance of petroleum in
Tanzania. PUMA Energy was particularly selected as a case study. The reason of
considering this company is that, the company deals with supplying petroleum
products thus the issue exists in this company apart from that, data were available and
accessible, and also it took a short time for researcher to collect data.
1.7 Significance of the Study
The findings of this research at PUMA Energy Tanzania Limited brought about many
beneficial to the researcher, academicians and the organizations as detailed below;
1.8 To the Organization
The study findings were beneficial to organization’s management and officers to

whom are engaged in supplying petroleum products with regards to understanding of
the financial and non-financial factors that real affect the supply chain performance
of the company.
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1.8.1 To Academician
i. The study was beneficial to the researchers and academicians who were
interested in knowing the factors affecting supply chain performance of
petroleum in the petroleum industry.
ii. It was also stand as a referencing material or source of data for their
research proposal and reports or further research in the same topic.
iii. On the other hand, student will use the research as a source of information
for their studies concerning to the factors affecting supply chain
performance of petroleum in the logistics area.
1.8.2 As a Researcher
i. The whole process of research will help the researcher to gain knowledge
and useful research skills.
ii. Also, the findings of this study will improve the researcher on
understanding the factors affecting supply chain performance of
petroleum in the logistics area.
iii. More specifically the study was helpful to a researcher to meet the
academic requirement of Mzumbe University for the award of Masters of
Science in Procurement and Supply Chain Management.
1.9 Organization of the Study
This dissertation has been organized on six chapters that are connected to the issues
concerning factors affecting supply chain performance of petroleum. Chapter one
presents an overview of the study concerning background of the study, statement of
research problem, research objectives and research question, significance of the study
and the scope of the study. Chapter two presents a review of literature in relation to
the themes of the study while chapter three presents the methodology that was used in
collecting and analyzing data. Chapter four included presentation of findings that
gathered from the case study. Chapter five also included discussion of the findings
drawn and lastly chapter six provided summary, conclusions and policy implications
that were drawn from the findings.
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CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
Literature review refers to the broad, comprehensive, in depth, systematic and critical
review of written, published and unpublished scholarly materials (Kothari, 2004).
This chapter covers conceptual definitions (definition of key terms and concepts),
theoretical review, arguments of various authors (empirical review) constructed on
the basis of the research problem and the Conceptual Framework.
2.2 Definition of Concepts and Terms
2.2.1 Supply Chain

Supply chain is a network within organization that carries out various activities and
processes to produce products and provide services to the end customers (Christopher
1992). Alternatively supply chain management is the combination of all network and
activities whereby manufactures, suppliers, distributors and retailers are involved to
improve products, services and information flow from upstream to downstream with
consideration of cost reduction through maintaining the level of service target
(Stapleton et al., 2006).
2.2.2 Upstream supply chain

Upstream supply chain focuses on the company's buy-side procedures that are
primarily providers that pass through accessible intermediaries. These include the
primary procurement and inbound logistics operations linked to the supply chain
model. (“(PDF) Comparison Between Upstream and Downstream Supply Chain
Management and How they are Affected by E-Business,” n.d.)
2.2.3 Downstream Supply Chain

The downstream supply chain is the supply chain's sales side procedures that include
clients and retailers. This is considered outbound logistics and fulfillment as the key
activities in downstream, other significant issues related to supply chain downstream
7
are marketing and management of customer relationship (“(PDF) Comparison
Between Upstream and Downstream Supply Chain Management and How they are
Affected by E-Business,” n.d.)
Downstream supply chain of petroleum products involves processing refineries,

transportation and distribution, and selling refined products to final users. Oil
refining, supply and marketing of products, wholesale and distributors are key
downstream company sectors. These products include gasoline, petrol, diesel oil,
natural gas, heating oil and other kinds of petrochemicals (Kiley, 2014).
2.2.4 Logistics
Logistics is a strategic method for handling the motion and storage of materials,
components and finished products (and associated data flows) and procurement
through efficient and cost-effective order fulfillment and future organizational profit
maximization (Christopher, 2016).
2.2.5 Distribution
Distribution is the movement or transportation of the material, party or finished
products (such as Oil, petroleum etc.) from the point of production to that of where
demand has been recorded, so as to fulfill customer’s expectations (Serdaris,
Antoniadis, & Tomlekova, n.d.)
2.2.6 Information Communication technology (ICT)

In today's globe, many organizations are presently striving to use ICT in their
business, many of whom use ICT not only to cut operating costs and improve
effectiveness, but also to provide quality customer services. Even governments
around the globe adopt ICT to provide their people with better facilities. ICT
implementation needs any company environment to promote open competition,
confidence and safety, interoperability and standardization (Dixon et al., 2002).
ICT relates to all techniques used in the leadership of telecommunications,

intelligence construction systems, broadcast media, audiovisual processing and
transmission systems and the control and tracking function of the network (Lucey,
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2005). The use of ICT like application of software, internet and telecommunication
can be used to enhance distribution of information from among supply chain
members and lead to optimize supply chain performance of an organization (Lewis
and Talalayersky, 2004). The use of ICT facilitates communications through ICT
tools such as fixed lines or mobile phones. Organization may also use computer with
software that are best to their activities for simple information processing needs that
may produce text or keeping track of accounting items (Kumar & Mohan, 2014).
While ICT can benefit a company in different ways but till in some developing
countries it said to be slowly adopted due different challenges that are faced such as
limited ICT knowledge, poor information and technology infrastructures, high cost of
adopting new technology, Inability to incorporate ICT in business processes,
incomplete public e-commerce laws (Lucey, 2005). Ritches and Brindley (2005) on
their study confirmed the positive effect of ICT on firm performance in terms of
market value and market share, profitability and productivity as ICT plays a vital role
on organizations output. Their study also revealed that production efficiency, cost
efficiency, process flexibility and customer satisfaction are all affected by ICT.
2.2.7 Price control

This refers to the limit set by the government of minimum or maximum prices for
goods and services. The price is said to be fixed at the level below or above
Equilibrium price (Collins Dictionary of Economics 2005). Price controls of
Petroleum products in Tanzania are set by Energy and Water Utilities Regulatory
Authority (EWURA). The government needs to avoid rising and falling prices above
the equilibrium and below equilibrium respectively. That method of prevention is
called price control (Chima, 2007).
Firms may intend to raise price of commodities for their profit maximization in the
market and force consumers to purchase such commodities at higher price, in order to
protect the interest of consumers the government now intervene and imposes
maximum price (price ceiling) above that no one will sell the commodity. In the other
side the government fix the minimum price or floor price to protect the interest of
producers this may be set above the equilibrium price that is determined by demand
9
and supply curves (Chima, 2007). In developing countries one of the commodities
that government intervenes on controlling prices is petroleum products. Governments
are intervening to affect petroleum prices and their impact. By limiting exports and
putting pressure on oil providers, the government imposes indirect measures to affect
prices (Kojima 2009). When oil prices rise, retail prices rise quicker like a rocket, but
when oil prices fall slowly like a feather, retail prices fall. (Bacon and Kojima, 2010).
In Tanzania the downstream petroleum sector deregulated in 2000 where in 2007
petroleum Act was amended to make EWURA as regulatory authority that issue
indicative and maximum prices of petroleum. As the regulator issue prices on a
monthly basis thus one uniform price for each type of fuel but differed by region.
This in line with the prevailing sector legislation (Petroleum Act, 2015, section 166),
the demand and supply laws govern the prices of petroleum products. EWURA will
continue to promote competition in the industry through the provision of pricing data
for petroleum products, including cap rates. This price data is designed to allow
stakeholders to create informed petroleum price choices at any given moment.
(EWURA website 2019).
Oil Marketing Companies are free to sell their products at a cost that provides them a
competitive advantage if that price does not exceed the price cap for the item
concerned as it is calculated using the formula authorized, which was gazetted
through the Government Notice No. 163 published in April 2018 and Government
Notice No. 269 published in June 2018 (EWURA website)
All gas stations are needed on obviously visible boards to publish petroleum product
prices. The price boards should obviously indicate charged rates, offered discounts as
well as any offered trade incentives or promotions. Consumers are motivated to buy
and deliver better services from stations that sell products at the most competitive
rates. It is an offense not to have prices released in front of petrol stations on boards
situated in obviously visible locations. Failure to comply with this directive will
result in EWURA taking punitive action (EWURA website 2019).
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When is pricing required?
There is a need to set price when a firm introduce a new product in the market or re –
introduces older product to a new distribution channels or in a new geographical
location, also when there is changes on fashion or in changed situations such as
competitions changes and many other reasons (Kotler and Keller, 2006). There are
key stages in pricing developed by Kotler and Killer;
Step 1: Identifying and selecting the pricing objective such as market share and
maximum profit, survival, market skimming or being a product quality leadership
selling at premium prices.
Step 2: Determination of demand and customer behaviors such as price sensitivity,

demand forecasting and price elasticity o which must be reflected in the prices.
Step 3: Estimation of cost in which it assists the identification of the lowest price that
a product can be sold at and which can recover firm’s costs that include variable and
fixed cost in both production and operational activities. It is important to know your
costs as it also assists to identify the desired target cost that enable a desired pricing
strategy.
Step 4: Analyzing prices and costs and offers of your competitors. The firm must
perform market survey in order to understand what is offered by other competitors in
terms of prices and offers so as to come up with counter strategies. The cost structure
of the company will determine survival and competitiveness of the company in the
business.
Step 5: The selection of a pricing technique depends on which goal may include
target return pricing, price marking or perceived value pricing.
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2.2.8 Value adding supply chain
Refers to describing the way that commercial businesses tend to generate additional
benefit or values during the cause of their usual operations (Lee, 2000). It is said that
in today’s marketing companies no longer compete one another rather their supply
chain does this is by adding value to core products of the company (Thomas, 2019).
A company can add value on its supply chain by expand product offerings, manage
inventory more efficiently, reduce the number of suppliers, being agile on serving
customers’ needs and reacting faster on changes of customers’ needs.
2.3 Theoretical Review
2.3.1 Transaction Cost Theory
The theory of transaction costs attempts to explain the company's presence. The
theory intended to reduce the costs associated in carrying out the transaction when
the firm makes decision on whether to make or buy a certain activity. The theory tries
to explain on how the firm can minimize its operating cost by delegating other
activities to the third part and act on the available resources to the core activities.
Therefore, the businesses assess the costs of exchanging resources with the setting
against the bureaucratic costs of carrying out certain operations within the business
(Business mate 2014).
According to Ronald C. (1937); Marchel and Richman, (2008) companies will grow
big after minimizing their cost of operating all the activities within the company.
Thus, company may seek to outsource some other activities so as to minimize cost.
When the costs performing some activities within the company are higher than
external cost of hiring then the company will downturn. And when the cost of making
is low and the cost of hiring is high then the company will grow by cutting down
such unnecessary cost which in great way will be transferred to other sources.
Transaction cost theory focuses on how transaction is organized externally or

internally. Managing transaction within the company include managing and
administering personal and acquisition of inputs and capital equipment. The
transaction cost of acquiring services from external provider includes cost of contract
management, costs of selection of sources, performance measurement, quality
assurance and dispute resolution (Williamson, 1989).
12
2.3.2 Theory Neoclassical Economics and Rational Choice;
2.3.2.1 Neoclassical economics
This is a framework for knowing the distribution between alternative ends of scarce
funds. There is little incentive for committed financing to generate precise numbers
because precise numbers reduce the opportunity of getting portion of the financing
[ CITATION Pic92 \l 1033 ].
2.3.2.2 Rational choice theory

It aims to comprehend the conduct of society and the economy. "It assumes that
individual activities are essentially rational and that individuals discover the expenses
and advantages of an intervention, acknowledging their preferred tasks and
limitations before making a choice (Sesame, 2008). The theory is used to underline
the explanation that underestimating expenses is economically rational because it will
boost income and profit probability. The theory of rational choices is regarded to
have significant ability to explain cost overruns, not only for financial reasons, but
also for psychological and political reasons (Sesame, 2008).
2.3.3 Resources Based view

The resource-based theory derives from the concept that their inner resources, as
opposed to their placement in the external setting, are the cause of the competitive
advantage of companies. Instead of merely assessing environmental possibilities and
threats in company, the competitive benefit relies on the distinctive resources and
capacities a company has. (Barney, 1995 as cited in Kaynak, 2012).
The company's resource-based view predicts that certain kinds of assets owned and
controlled by companies have the potential and promise competitive advantage and
ultimately superior company performance (Ainuddin et al., 2007 as cited in Davis,
2016).
13
The resource-based approach addresses competitive benefits linked to the ownership
by the company of heterogeneous assets (financial, physical, natural, technological,
organizational and reputational) and capacities (combining two or more resources).
These resources and capacities represent the company's core competence and
eventually serve as its source of competitive advantage. (Bolat and Yilmaz, 2009).
There are certain conditions that must be fulfilled to ensure that resources provide a
sustainable competitive advantage. Among the characteristics considered meaningful
are: rare, expensive to imitate, useful and structured effectively. Therefore, once
these characteristics have been accomplished, the business can gain sustainable
competitive advantage (Hedman and Kalling 2002). Fundamentally, the resources
involved are human capital, physical resources and organizational capital resources
(Axelsson and Wynstra, 2002).
The ides of resources-based theory in this study is that the company should manage
its internal resources effectively and efficiently for its main activities such as
production, transportation and other activities as to influence the successful
performance of its activities.
2.3.4 Agency theory

According to Eisenhardt, (1989) during any transaction involving two parts with
relationship including the principal part that is the one delegates work and the agent
part that is the one who performs the work, there may occur two problems namely
conflict of interests and difficult in measuring agent work by the principal part.
Theory holds that during any transaction there may raise conflicts of interests that as
firm or principal require preparing on how they will handle these disputes. As the
factors used include some relationship, thus the theory used to assess how these
conflicts arise during transaction may be handled, also since supply chain involve
many actors that manufacturer, distributors and other agents in which there may raise
conflicts during transaction, thus the need to solve this conflicts is of great
importance to ensure the realization of their responsibilities.
14
2.3.5 Theory System
The system developed by Yourdon (1989), Weinberg (1975), Miller (1978) and
Von Bertalanffy (1969). This theory gives details on different components of a
complicated supply chain that consists of people, data, equipment, economic
resources and capital, this is to form a subsystem that is part of the supply chain
network. The theory claims that the theory scheme is essential for any business for
holistic perspective because it helps to comprehend the inner and external variables
that influence the supply of the business.
2.3.6 Theory of efficiency

The word economy economic efficiency relates to the use of resources to maximize
products and services output (Sullvan and Shefrin 2003). An economic system can be
said to be efficient if it can only generate and provide the community with the least
use of funds. Since no one can be produced better without creating another worse, I
have frequently referred to the effectiveness of Pareto. Economic effectiveness
includes two primary strains in financial thinking that emphasize government-created
distortions and market-created distortions. Government-created distortion is said to
be decreased by lower government participation and probable market distortion
(Barr, 2004). A market can be said to have economic efficiency if the price of the
product and services supplied and provided by the market is equivalent to the value
placed on it by the customer as depicted in marginal costs. Because productive
resources are scarce, the resources must be assigned at the correct moment to the
correct quantity of abuse of those resources. And productive efficiency relates to
when, at the smallest possible average total cost, units of products are provided. This
can be shown when drawing a balance diagram for the company this condition is
fulfilled if the balance is at the minimum (Barr, 2004).
15
2.4 Empirical Review
2.4.1 Introduction
There is a little number of literatures reviews that became in debate concerned with
the factors affecting supply chain performance of petroleum products, also the
number of studies concerned with such factors as well as the quantity of studied.
2.4.2 Worldwide Context

A study by (Kurian, Unnikrishnan, & Sawant, 2018) The research emphasizes green
supply chain management (GSCM) practices and technologies in India's petroleum
industry and aims at analyzing important variables that manipulate supply chain
management. The research was based on a survey of senior petroleum industry
managers in India. A questionnaire was instructed to 42 senior managers to explore
the various green supply chain management methods and the answers were analyzed.
The finding of the research shows that significant advantages are regulatory
compliance and the implementation of environmentally friendly methods. There are
also different types of technologies and the way in which participating firms operate.
The research also shows that these methods need to be implemented as incremental
changes in the current scheme (Kurian et al. 2018).
Another study by (Varma, Wadhwa, & Deshmukh, 2008) that evaluating supply
chain performance of petroleum. Application of the analytical hierarchy method for a
balanced scorecard. The primary objective of the research was to suggest a technique
for evaluating supply chain process efficiency in the oil supply chain sector. The
amount of variables determining supply chain efficiency under four Balanced
Scorecard (BSC) views has been legalized from the point of perspective of
professionals in the field (SMEs). Thus, in the form of pairwise comparisons, the
comparative importance of the criteria view of SMEs was gathered. The method of
analytical hierarchy (AHP) was used to determine the relative weights of multiple
views as well as the variables in view. The finding shows the significance of four
views in terms of supply chain efficiency(An, Wilhelm, & Searcy, 2011), the study
provides a literature review of research on the biofuel supply chain. It categorizes
prior research based on decision time frame as well as level in the supply chain.
16
Finally, the study underlines unique needs to support decisions that integrate the farm
with commercials levels (i.e., storage, pre-processing, refining and distribution) and
identifies fertile avenues for future research on the biofuel supply chain. OR models
are needed to help assure the economic viability of the biofuel industry. They can be
used by growers, processors, and distributors to design and manage an integrated
system and by government to inform policies needed to stimulate the growth of the
industry and, perhaps, subsidize it.
Finally, a study by (Raut, Narkhede, & Gardas, 2017) identifying key success factors
in viable supply chain leadership practices in India's petroleum and gas sectors. The
paper aimed at presenting a strategy to define key success factors for the effective
application of supply chain management procedures in the Indian oil and gas sectors.
The research used methodology of interpretive structural modeling to determine the
interactions between variables. The research discovered that global climate pressure
and resource ecological inadequacy were the most prevalent criteria that could force
the oil and gas sectors to adopt sustainable supply chain management procedures
(Raut et al, 2017).
2.4.3 Africa Context

A research by (Muturi and Ngugi, n.d.) They studied the performance determinant of
supply chain schemes in Kenya's oil sectors. The study took both quantitative and
qualitative approaches and routine scientists to collect both quantitative and
qualitative data. Consequently, the research results show that the research sought to
determine the determinant impact of crude oil costs on the performance of supply
chain systems in the oil industries. Additionally, although crude oil prices were
significant predictors in the general review for all petroleum companies and thus
encounters with supply chain structures, interviews and written replies gave a high
level of data on crude oil elements that encouraged the leadership efficiency of
registered oil companies (Muturi and Ngugi n.d.).
The survey of variables affecting the availability of petroleum products in Kenya
undertaken by (Gicharu & Mang'usho, 2017). A case concerning the Kenya Pipeline
Company. The study used a descriptive research design to assess the data collected.
17
The results of the research indicated that storage capability seemed to be an
significant problem affecting the supply of petroleum products resulting in low
output and reduced lead time. The infrastructures was found to be inadequate at the
depot in meeting the supply demand of petroleum products needed by consumers,
regulations adopted meet the consumer requirements and set standards but due to lack
of enforcement have led to low standards in petroleum products handling. The quality
of petroleum products availed at the depot meets the set quality standards but due to
ignorance, quality at times is compromised leading to adulterated petroleum products
being availed to consumers.
The research undertaken by oil companies in Kenya on the variables influencing

supply chain management (FA, 2013). The research was performed with three goals:
the impact of facilities on petroleum marketing companies ' supply chain
management, the impact of the open tender scheme on supply chain management and
the impact of advance payment of taxes on supply chain management. Descriptive
research design is adopted by the study. The general mean also stated agreement with
price control elements, but the same as facilities, as the normal deviation was less
than 1. The research also discovered that the open tender scheme was a flexible way
to manage oil products supply, and lastly, the competitive benefit of petroleum
marketing firms lowered the advance payment of oil products supply.
Econometric data analysis on supply chain system performance in the petroleum

industries in Kenya by (Osoro, Muturi, & Ngugi, 2015). The research led with the
following study goals; the impact on the results of the supply chain system of ICT,
skill level and tendering processes. Using a survey design, the research was aimed.
The research discovered that econometric data analysis was necessary in order to
validate the impact of supply chain system efficiency by making adequate projections
from upstream to downstream to achieve. Barua (2010) conducted a study on the
Challenges facing Supply Chain Management in the Oil Marketing Company, His
study was generally based on assessing the challenges facing SCM in the oil firms.
The study found that there are countless challenges including the challenges such as
capacity constraints in different modes of transportation, oils and outdated pump
18
equipment, global fluctuations of oil prices, uncertainty on oil supply and oil carters.
The writer also indicated other challenges such environmental health concern and
safety standards, political unstable environment, unfair allocation of haulage in the
refinery, oil pump price regulations, inadequate storage facilities for fuel inventory
and customer demand for quality. Also the study shows that strategic planning, 3pl,
close partnership and collaboration with suppliers, vertical integration, E-
procurement and outsourcing non-core activities, supply chain benchmarking are
ways that oil company in Kenya manage their supply chain with supportive Supply
chain management systems such as E business, Supplier relationship management
(SRM) and Warehousing Management System (WMS). Although the study based on
assessing the challenges facing SCM of oil companies but specifically it does indicate
various factors that affects SCM of Oil, the study indicated that Information systems,
price fluctuations, environmental changes, advance payment of taxes, price controls
as well as open tender system.
Ngoto (2016) conducted a study on factors affecting supply chain management

performance; a case of International Non-governmental Organization in Kenya. On
this study He included 172 respondents who were supply chain staff from IGOs.
Randomly sampling was used in selecting sample size and he came up with the result
that the supply chain management performance was positively affected by supply
relationship although many Non- governmental organizations are challenged by
network complexity in management of flows. Also, the study revealed that supply
chain management performance was affected by contract management as little
number of Non-organizations monitor their contracts by using updated document
policy. It was also noted that Information Sharing is crucial to these organization in
supply chain management performance although some of the organizations are still in
use of paper works as the mode of communication.
19
Wawuda and Mungai (2016) on factors affecting distribution of oil products in
Kenya. The study aimed to establish the effect of pilferage, infrastructure and effect
on capacity on distribution of the oil products in Kenya. Study used a descriptive case
study design. The study findings revealed that on pilferage almost all respondents
agreed that it affects distribution of oil, 41% respondents agreed that infrastructure
affects distribution of oil products, 45% respondents agreed that capacity affects oil
product distribution and on information technology doesn’t affect distribution of oil
products in Kenya.
2.4.4 Tanzania Context

In Tanzania a study by (Kinyondo and Villanger, 2017) undertaken on local content
requirements in the petroleum sector in Tanzania. Recently, the nation has exposed
massive natural gas fields offshore. This resulted the government to develop local
content policies to enhance employment and company possibilities for the sector's
citizens. They study the process behind the establishment of the policies and
stakeholders’ position. They found that although there is positive view among
stakeholders of impressive policies, there is doubt to such degree that it designs
recommendations of which policies to include. The reason is the Government
monopolized the policy development process and refrained from undertaken
consultative process. So, the findings suggested that Tanzania policy development
should include deep consultations to maximize decision knowledge base of decision
makers and add transparency of the process and manage expectations.
2.4.5 Summary and knowledge gap

From the above literatures review, it is clearly that the studies on the factors affecting
supply chain performance in the petroleum industry in Tanzania are inadequate and
even not well known. The most of the studies available from the higher learning
institutions in Africa as evidenced from literature review that Kenya is the
dominating country that have more studies in East Africa and mostly studies in this
area of supply chain performance from developed countries. Furthermore, most of the
studies on supply chain performance in petroleum are descriptive studies from other
countries and only (Osoro, Muturi, & Ngugi, 2015) integrated one petroleum industry
20
in Kenya, Challenges affecting performance of supply chain system in the petroleum
industry. Similarly, the study recommended that factors contributing to effective and
efficiency in forecasting by all parties needs to be merged in prudent decision making
need to be developed. Challenges such as the exiting policy and legal framework,
procurement and logistics courses available to develop knowledge in the industry.
Similarly, the study by (Kinyondo & Villanger, 2017) in Tanzania suggested that
policy development should include depth consultation with stakeholders to maximize
knowledge base in decision making process.
The study on factors that affect distribution of oil products in Kenya by (Wawuda &
Mungai, 2016), the study revealed that information technology doesn’t affect
distribution of oil products as a part of supply chain performance of petroleum
products in Kenya but also it found that infrastructure, capacity and pilferage affect
distribution of oil products as a result of affecting supply chain performance of
petroleum products in Kenya. This findings is in line with (FA, 2013), who
recognized that infrastructure, advance payment and open tender system play a vital
role in supply chain management performance of oil companies in Kenya. On the
other hand, the literature revealed that funding is a key resource in supply chain
performance of petroleum industries. The identification of critical success factors of
sustainable supply chain management of oil and gas industries by (Raut et al., 2017)
recommended that climatic pressure and inadequacy of resources were most criterion
that forced implementation of supply chain management practices in oil and gas
industries in India. This is in line with the (Kurian et al., 2018) who established that
regulatory compliance and environmentally consideration emphases green supply
chain management practices and innovation in petroleum industrial sector India.
The literatures result a wide gap on supply chain performance in the petroleum
industries in the following areas; financial factors include price control of petroleum
products and other factors which include ICT usage, infrastructure, supply chain
management system, and value-added supply chain on petroleum industries in
Tanzania. It is appeared that there is a lack of strategic awareness and thinking
concerned with regulatory policy on managing supply chain performance of
21
petroleum industries in petroleum industries. This is similar with the findings of
(Kurian et al., 2018) who established that regulatory compliance emphases green
supply chain management practices and innovation in petroleum industrial sector.
There is only study in Tanzania have been carried on the similar context resulted a
wide gap from government policy and stakeholders who lack information concerned
limitations which affect supply chain performance in petroleum industry in Tanzania.
The effective government policy on supply chain management of petroleum is a

company’s competitive strategy to face competitors and meet customer needs, this
guarantee a study to fill a gap in Tanzania context.
22
2.5 Conceptual Framework
Independent variables Dependent variable
Efficiency
fiFf Information
and Communication
Technology
Price Control
Supply chain
performance
Effectiveness
Value added on supply
chain
Outsourcing, Green
environment, shorter lead
time and location and
collaboration.
Management system
Allocation of resources.
Supply chain expertise
Source: Researcher’s construct (2019)
Figure 2.1: Conceptual Framework
23
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction
This chapter is devoted to give a description on how researcher carried out this study
for accomplishment of desired goals.
Research methodology refers to the way in which the research is designed and the
analyzed with the description of reason for using such design or method (Kothari,
2004). This chapter will cover research design, study area, units of analysis, variables
and their measurement, population and sample size, sampling techniques, methods of
data collection and methods of data analysis and presentation.
3.2 Type of the study
According to Kothari (2004) research design is an arrangement of conditions for

collection and analysis of data in a manner that aims to combine relevance to research
purposes with economy in procedure. Researcher used descriptive research design for
this study and case study approach for primary data collection, as it involves a single
unit of inquiry that PUMA Energy Tanzania Ltd. This is due to the fact that it was
less expensive in terms of time, money and environment, and it was flexible in data
collection methods since the researcher confined in a single area where the use of
research instruments become easier compared to survey.
3.3 Study area
Researcher conducted the study at PUMA Energy Tanzania Ltd; where by data were
collected. As one among the companies that involved in distribution of petroleum
products and all logistics activities are carried within. The researcher found the place
was favorable for the study investigation.
24
3.4 Study population
Best and Kahn (1998) define population as a group of individuals who have
characteristic in common that are of interest to the researcher. The targeted
population was Logistics and Transportation department, ICT department, Finance
department, supplies department, and other department that provided comprehensive
details and relevant information on the factors affecting supply chain performance of
petroleum products. The total population that researcher considered was seventy (85)
employees, though they are a lot of employees but only those involved in supply
chain in one way or another were included.
3.5 Unit of analysis
This means the major entity that a researcher analyzing in the study for example any
of this could be unity of analysis. Individuals, groups, artifacts (books, photos, and
newspapers), geographical units and social interactions like dyadic relations, divorces
and arrests (William, 2006). Staffs of the company were researcher’s study unit of
analysis.
3.6 Variables and their measurement
Kothari (2010) defined measurement as a process of assessing numerical values to

characteristics of the object, event of phenomena that we are studying. There are four
basic types of measurement scales that can be used for capturing and analyzing these
data but researcher used only three measurement i.e. normal, ordinal, and ratio scales.
Normal scales are used for identity only by assigning numerical to variables. The
variables are usually in the form of categories such as gender, race, and colour so on.
The numbers do not signify order of magnitude or size and can be interchanged at the
beginning without affecting the results of the analysis For example Numerical can be
assigned to males and the numerical can be assigned to females. Researcher
distributed questionnaires to both male and female. Ordinal scales can be used for
data that exhibits order (For example. ascending order). Numbers are assigned to
variables so that they portray the order of magnitude but not size (Kothari, 2010).
25
Ratio scales assign numbers to variables which depict order of magnitude take into
account the difference between scale values, and reflect absolute magnitudes or size.
These used for analysis of different questionnaires outcome.
3.7 Sample size and sampling techniques
Sample consists of some of the elements selected or chosen to represents the whole
population of our references. Sample are used in order to save time and money,
however the sample chosen should be representatives. Sample selection is affected by
the size of the population, accuracy required, degree of variability of the elements in
the population as well as confidence level required. According to Kothari (2004)
Sample is a group of individuals that is observed and whose findings allow
generalization about the population (Ary, Jacobs, & Sorenson, 2010).
3.8 Sample size
The sample size of this study comprised 56 staff from the company, from the
categories that shall be selected such as Human resource and Administrative
department, ICT members, Finance and officers from other departments which makes
the total of 56 respondents as the researcher`s sample.
Table 3.1: Sample composition
S/N Departments Population Sample Percentage

size (%)
1 Logistics and Transportation 20 10 28.6
ICT Members 17 9 14.3
2 Finance 13 10 17.1
3 HR & administration 15 14 14.3
4 Other departments 20 13 25.7
Total 85 56 100
Source: Field Survey, (2019)
26
3.9 Sampling Techniques
Researcher drew sample by using simple random sampling technique as it refers to

probability sampling where by all members in the population has equal chance of
being selected to form a sample. This involves the researcher to select the sample
without replacement and maintains the original sampling frame (Adam and
Kamuzora, 2008).
The researcher applied simple random sampling technique because it allows each
member of department to have equal chance of being selected. This technique is
appropriate where the sampling frame is not too large and each unity is easily
accessible (Adam and Kamuzora, 2008).
Researcher also applied purposive or judgmental sampling technique as it is a type of

non-probability sampling that is most effective when one needs to study a certain
cultural domain with knowledgeable experts within (Bernard, 2002). Here a
researcher decides what is needed to be known and sets out to find people
knowledgeable, experienced and are willing to provide adequate information which is
virtual to the study.
3.10 Types and sources of data
The researcher will collect both primary and secondary data which will be organized
and analyzed to answer the research questions.
3.10.1 Primary data

Are those data which are collected afresh and for the first time, and thus happen to be
original in character they are also referred to as original data (Saunders et al. 2007).
Researcher will collect primary data from questionnaires.
27
3.10.2 Secondary Data
These cover most the information from the organization documentation source.
Where the researcher will use different documents both published and unpublished
data records to collect data concerning the study. Those documents include the
journals, past research report, broacher, textbook and other materials on the similar
material about the topic (Kothari, 2004).
3.11 Data collection methods
This part explains the methods or techniques that researcher employed in data
collection during the study. The researcher used questionnaires as the method of
collecting data.
3.11.1 Questionnaire
A questionnaire is a carefully designed instrument (written, typed or printed) for
collecting data directly from people. It consists of a set of questions and statements
(Kothari, 2004).
There are different questionnaires which are written so as to be answered. The

researcher distributed both open and closed ended questions to units of sample from
population. The questions were clear and brief by using simple and understandable
language. Questionnaires were attached and administer to PUMA Energy Tanzania
Limited management and employees who are dealing with petroleum logistics.
Merits of Questionnaire
There is low cost even when the universe is large and is widely spread
geographically. It is free from the bias of the interviewer; answers are in respondents’
own words, Respondents have adequate time to give well thought out answers.
Respondents, who are not easily approachable, can also be reached conveniently. In
addition, large samples can be made use of and thus the results can be made more
dependable and reliable (Kothari, 2013).
28
3.11.2 Interview
Kothari (2004; 97) defined Interview as the method of data collection that involves
presentation of oral-verbal stimuli and reply in terms of oral-verbal responses. This
method can be used through personal interviews and if possible, through telephone
interviews. The researcher will use this method to seek the important and
professional based information from employees within the company according to the
need; the researcher will prepare guideline questions for the unstructured interview in
order to obtain some explanation of the questions that will be asked concerning the
factors affecting supply chain performance of petroleum products in the Logistics
areas.
3.11.3 Documentary review

Researcher also used documentary review as the method in collecting secondary data
such as data from organization documents, Manuals, books, journals, annual
company reports including audits reports, research papers relating to the problem and
other published and unpublished materials with acknowledgements.
3.12 Validity and Reliability Issues
3.12.1 Reliability of data

Reliability is a condition in which the same results achieved whenever same
technique is repeated to do the same study (Babbie 1995). The main measure that
researcher will apply to ensure reliability of data shall be tested against interviews,
documentation and questionnaire. On the other hand, reliability aims at ensuring
reliable data are collected to enhance meaningful study.
3.12.2 Validity of Data

A mechanism that ensures that the process implemented to collect data has collected
the intended data successfully. Validity refers to the extent to which an empirical
measure adequately reflects the real meaning of the subject under investigation
(Babbie, 1995).
29
As suggested by Saunders et al. (2007), that for the research study to be valid should
have a minimum of 30 objects as sample elements that is n>30, where n is the sample
element used for data collection and as for this study researcher will use 70 sample
elements for data collection, it is therefore expected to be valid research. Validity
also indicates how sound the research is.
3.13 Data analysis methods
Data analysis means the computation of certain measures along with searching for
patterns of relationship that exist among data groups (Kothari, 2004). According to
Lucey (2002) “there are two types of research models used in analyzing data namely
quantitative method and qualitative method”. The data will be analyzed by using two
approaches namely, qualitative and quantitative. Due to the nature of the study
researcher will greatly use quantitative method and other data shall be entered into
computer and analyzed by using Correlation Analysis and regression analysis tools.
Generally, the Statistical package for Social Science (SPSS) was used as software.
3.13.1 Qualitative Analysis

This approach involves the use of non-numeric examination and interpretation of
observation for the purpose of discovering. In this study researcher will use content
analysis tool to analyze qualitative data. This will depend on the nature of data that
researcher will collect and that will be presented in form of code.
3.13.2 Quantitative Analysis

The quantitative approach involves the manipulation of numbers, use of tables of
frequencies and percentage to present findings (Lucey 2002). The study also
employed quantitative method in which researcher used correlation analysis and
generally the Statistical Package for Social Science (SPSS) also used as software.
30
CHAPTER FOUR
PRESENTATION OF THE FINDINGS
4.1 Introduction
This chapter presents and analyses the research findings of factors affecting supply
chain of petroleum products in Tanzania. The findings based on four research
objectives which were analyzed by using SPSS as statistical software.
This chapter also gives the overview description of demographic characteristics of

the population area in terms of age, sex, education level and occupation. It further
provides assessment of information and communication usage as among factors that
affect supply chain performance of petroleum products, price control factor, supply
chain management system of the company as well as value added supply chain
through PUMA Energy Ltd.
4.2 Respondent general information
This part describes the profile of the respondents as obtained from the field. The
study used 80% of the sample respondents as shown on the table 4.1. The
questionnaires were distributed to 56 respondents out of 70 which were filled in and
returned to researcher in which makes a total of 80 percent as shown on the table
below.
4.2.1 Age analysis

Age of respondents is an important variable as it helps the researcher to understand
the age of workers in the company and if in one way or another it has impact on the
performance of different tasks in the company. The details of age of respondents
were given by the respondents in the questionnaires that were distributed. The
respondents were of different ages as shown on the table 4.1 as
31
Table 4.1: Age of Respondents
Cumulative
Frequency Percent Valid Percent
Percent
Valid 21-30 16 28.6 28.6 28.6

31-40 17 30.4 30.4 58.9
41-50 13 23.2 23.2 82.1
50-above 10 17.9 17.9 100.0
Total 56 100.0 100.0
Source: Field data (2019)
4.2.2 Gender analysis
The gender of respondents was so important as to find out if all genders were well
represented. The study sought to find out the gender of respondents by asking all
respondents to put a tick on their respective gender.
As shown on the table 4.2, majority of respondents about 38 (68%) were male and
female contributed to18 (32%) of the respondents. However, there was imbalance
between the numbers of employee’s gender in PUMA Energy Ltd due to the nature of
tasks that were performed within the company. Thus, according to the given number
of respondents it shows that there is greater number of male respondents than female
respondents so the finding imply that PUMA energy employs men than women as
shown in the table 4.2.
32
Table 4.2: Gender respondents
Cumulative
Percent
Valid male 38 67.9 67.9 67.9

female 18 32.1 32.1 100.0
Total 56 100.0 100.0
4.2.3 Respondents Education level

The study sought to establish the education level of respondents who eventually
involved in supply chain management of the company. Understand the border areas
on the factors affecting supply chain performance of oil companies can be determined
by education level of respondents. Therefore, data concerning the level of education
of respondents were presented in categories as Masters Level were 7 (12.5)
respondents, bachelor degree level 26 (46.4), Diploma level were 19 (33.90) and
certificate and other low-level education were of 6 (10.7) respondents. The study
revealed that many employees who hold bachelor degree are of greater number than
other levels of education followed by diploma, master’s level and certificate level.
Therefore, the findings show that majority of respondents engaged in supply chain
were having bachelor degree, that assured provision of valid information that led to
quality report.
33
Table 4.3: Education level
Cumulative
Percent
Valid Masters 7 12.5 12.5 12.5
Bachelor degree 26 46.4 46.4 58.9
Diploma 17 30.4 30.4 89.3
Certificate 6 10.7 10.7 100.0
Total 56 100.0 100.0
4.2.4 Respondents working experience

The research also gathered information from the respondents basing on the duration
they have been working in Puma Energy Ltd. The data concerning working
experience were presented in four categories as follows, 0-2 years, 3-4 years, 5-6
years and 7 years and above. The study sough to find information from the
respondents basing on duration they have been working at PUMA Energy whereas
from 0-2 years were 11 (19.6%) respondents, 3-4 years were 16 (28.6%) respondents,
5-6 years were 13 (23.2%) respondents and 7 years and above were 16 (28.6%)
respondents. This shows that about more than 30 respondents have three and above
years working in Puma Energy Ltd, through these findings the study implies that
more workers have experience in performing supply chain of the company which
helps the researcher to be sure that the information provided by respondents were of
great relevance for the study. See Table below
34
Table 4.4: Working experience
Cumulative
Percent
Valid 0-2 11 19.6 19.6 19.6
3-4 16 28.6 28.6 48.2
5-6 13 23.2 23.2 71.4
7-above 16 28.6 28.6 100.0
Total 56 100.0 100.0
4.2.5 Distribution of respondents by department

The researcher gathered information concerning occupation of respondents where
there were five categories of department which were Logistics and transportation
department, Finance, Human Resources department, ICT Department and other
department as respondents had to choose on the questionnaire in which category is
engaged. See table below;
Table 4.5: Occupation by department

Cumulative
Percent
Valid Finance 10 17.9 17.9 17.9
Supplies department 9 16.1 16.1 33.9
ICT Department 10 17.9 17.9 51.8
Transport and Logistics 14 25.0 25.0 76.8
Other departments 13 23.2 23.2 100.0
Total 56 100.0 100.0
35
4.3 Data analysis in relation to specific objectives
4.3.1 The effects of ICT on SC performance of petroleum products

The first objective of this study was to determine the effects of ICT on SC
performance of petroleum products. The regression analysis was used to determine
the effects of ICT on SC performance. The results in table 4.6 below indicate that
59.4% of variation on SC performance explained by ICT (Adj. R 2 =0.594). This
implies that 40.6% of variation on SC performance explained by other variables.
Table 4.6: Model summary
Model Summary
Std. Error of the
R R Square Adjusted R Square
Model Estimate
1 .776 a
.602 .594 .465
a. Predictors: (Constant), ICT
Source; Field data (2019)
The findings also revealed that ICT has significant effects on SC performance of
petroleum products since its probability value (sig) of 0.000 which is less than 5%.
The results indicated in table 4.7 below:-
36
Table 4.7: Coefficient results
Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta T Sig.
1 (Constant) 4.607 .062 74.100 .000
ICT .567 .063 .776 9.034 .000
a. Dependent Variable: SC performance
Correlation analysis
The researcher sought to determine the direction and degree of relationship between
ICT and SC performance of petroleum products. Pearson correlation coefficient was
used to determine the relationship between variables. Pearson correlation coefficient
value range from +1 to -1. The correlation coefficient value of +1 mean that the
variables are perfect positive correlated while correlation coefficient of -1 mean that
the variables are perfect negative correlated. The findings from the table 4.8 below
indicate that there is perfect positive relationship between ICT and SC performance
of petroleum products since the correlation coefficient is 0.776.
37
Table 4.8: Correlation analysis between ICT and SC performance
Correlations
SC performance ICT
SC performance Pearson Correlation 1 .776**
ICT Pearson Correlation .776** 1
**. Correlation is significant at the 0.01 level (2-tailed).
4.3.2 To determine the extent of price control on SC performance of petroleum

products
The second objective of this study sought to determine the extent of price control on
SC performance of petroleum products. The regression analysis used to determine the
extent of price control on SC performance of petroleum products. The results in table
4.9 below show that 21.5% of variation on SC performance explained by price
control (Adj. R2 =0.215).
Table 4.9: Model summary
Std. Error of the

Model R R Square Adjusted R Square Estimate
1 .479 a
.229 .215 .647
a. Predictors: (Constant), price control
The findings also revealed that price control has significant effects on SC
performance of petroleum products since its probability value (sig) of 0.000 which is
less than 5%. The results indicated in table 4.10 below:-
38
Table 4.10: Coefficients results
Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta T Sig.
1 (Constant) 4.607 .086 53.266 .000
Price control .350 .087 .479 4.009 .000
a. Dependent Variable: SC performance
4.3.3 To assess the effect of value added on downstream SC performance

The researcher sought to assess the effect of value added on downstream supply
chain as the third objective of this study. This objective aimed at studying the ways
that the firm adds value to their supply chain of petroleum products and the initial
drivers identified were outsourcing non-core activities of the company, focusing on
green environment and provision of social responsibility, ideally minimization of
lead time and well aligned value-added system. The findings were presented on the
above tables;
4.3.3.1 Outsourcing non-core activities

Respondents were asked to agree or disagree on whether outsourcing activities that
are non-core to the operation adds value on the company’s supply chain. 38
respondents equal to 67.9% strongly agree that outsourcing adds value on supply
chain of petroleum, 13 respondents equals to 23.2% agree on the question, 2
respondents equals to 3.6% were not sure if outsourcing adds value, 2 respondents
equal to 3.6% disagree on the question and 1 respondent equals to 1.8 % strongly
disagree on the question.
39
Table 4.11: Outsourcing non-core activities
Cumulative
Percent
Valid Strongly disagree 1 1.8 1.8 1.8
Disagree 2 3.6 3.6 5.4
not sure 2 3.6 3.6 8.9
Agree 13 23.2 23.2 32.1
strongly agree 38 67.9 67.9 100.0
Total 56 100.0 100.0
The findings revealed that 90 percent of respondents agreed that outsourcing non-
core activities adds value by letting the management to focus on the core activities of
the company. And to support the answer the researcher sought to find out what
exactly non-core activities that PUMA Energy outsource. Respondents initially
mentioned some of the activities that company outsource were Transportation, IT
Consulting, Business consulting service, Engineering consulting and minor activities
of the company.
4.3.3.2 Focus on Green environment and social responsibilities

Respondents were asked to respond on whether focusing on green environment and
social responsibilities adds value on the supply chain of petroleum. 37 respondents
equal to 66.1% strongly agree that focusing on green environment reduces
environmental footprint adds value on supply chain of petroleum, 14 respondents
equal to 25.0% agree on the question, 2 respondents equals to 3.6% were not sure if
green supply chain environment adds value on SC performance of petroleum, 2
respondents equal to 3.6% disagree on the question and 1 respondent equals to 1.8 %
strongly disagree on the question.
40
Table 4.12: Green supply chain Environment
Cumulative
Percent
Disagree 2 3.6 3.6 5.4
not sure 2 3.6 3.6 8.9
Agree 14 25.0 25.0 33.9
strongly agree 37 66.1 66.1 100.0
Total 56 100.0 100.0
The findings revealed that 81.1 percent of respondents positively responded that
focusing on green supply chain environment adds value on supply chain performance
of petroleum products. The study implies that green supply chain environment
includes safe working conditions (EHS), green storage facilities, and green operations
and investing in cleaner fuel that diminishes air pollution o the environment.
4.3.3.3 Market location

Respondents were asked to agree or disagree on whether market location adds value
on supply chain performance. 37 respondents equal to 66.1% strongly agree that
location in supply chain is virtual to its SC performance of petroleum, 14 respondents
equals to 25% agree on the question, 4 respondents equals to 7.1% were not sure if
market location adds value over supply chain, 1 respondent equal to 1.8% strongly
disagree on the question.
41
Table 4.13 Supply Chain Coordination
Cumulative
Percent
not sure 4 7.1 7.1 8.9
Agree 14 25.0 25.0 33.9
strongly agree 37 66.1 66.1 100.0
Total 56 100.0 100.0
The findings revealed that more than 80 percent positively responded to the question
and the less negatively responded to the question. These findings imply that value
added in SC greatly depend on market location. To support that answer researcher
conducted interview with one of respondent and the remarks were as follows;
“We have expanded our stations up to 52 retail sites and operating over 8 airports in
Tanzania, our retails station this is to ensure that our customers find PUMA Energy
wherever they are around Tanzania.”
4.3.3.4 Shorter lead time adds value on SC performance

Respondents were asked to respond on their views that lowering lead time on
delivery of orders adds value in SC. 38 respondents equals to 67.9% strongly agree,
12 respondents equals to 21.4% agree on the question, 1 respondent equals to 1.8%
were not sure if lowering delivery time an add value to SC, and 5 respondent equals
to 8.9 % strongly disagree on the question.
42
Table 4.14 Shorter lead time
Cumulative
Percent
not sure 1 1.8 1.8 10.7
Agree 12 21.4 21.4 32.1
strongly agree 38 67.9 67.9 100.0
Total 56 100.0 100.0
The findings reveal that 89 percent of respondents agreed that addition of value in
supply chain includes quick response on orders which enhance on time delivery of
fuels on the required ordered stations.
4.3.4 Management system of the company and supply chain performance of

petroleum products.
The fourth objective of this study was to identify ways that management system of
the company affects supply chain performance of petroleum products. Researcher
wanted to assess if management system of the firm affect supply chin performance by
asking respondents on how well expertise of SC in the company effectively perform
their duties on supply chain operations, is there good allocation of facilities that
support supply chain activities, and does the company coordinates supply chain
actors in making SC supportive decisions and as well as if the company complies
with supply chain guidelines of the company. The findings were as shown on the
tables below;
43
4.3.4.1 Adequate expertise
Respondents were asked to respond on their views that is there adequate expertise in
the company? 11 respondents equal to 20.4% said yes and 43 respondents equal to
79.6% said no.
Table 4.15 Adequate expertise

Frequency Percent Valid Percent Cumulative Percent
Valid yes 11 20.4 20.4 20.4
no 43 79.6 79.6 100.0
Total 54 100.0 100.0
4.3.4.2 Effective allocation of resources

Respondents were asked to respond on their views that their adequate expertise in the
company? 14 respondents equal to 25.9% said yes and 40 respondents equal to 74.1%
said no.
Table 4.16 Effective allocation of resources

Frequency Percent Valid Percent Cumulative Percent
Valid Yes 14 25.9 25.9 25.9
No 40 74.1 74.1 100.0
Total 54 100.0 100.0
44
4.3.4.3 Supply chain coordination
Respondents were asked to respond on their views that their adequate expertise in the
company? 36 respondents equal to 66.7% said yes and 18 respondents equal to 33.3%
said no.
Table 4.17 Supply chain coordination
Frequency
Percent Valid Percent Cumulative Percent
Valid yes 36 66.7 66.7 66.7

no 18 33.3 33.3 100.0
Total 54 100.0 100.0
45
CHAPTER FIVE
DISCUSSION OF THE FINDINGS
5.1 Introductions
This chapter discusses research findings which presented and interpreted in chapter
four. The findings based on specific objectives which were identified previously on
chapter one. Generally, the purpose of this study was to assess factors affecting SC
Performance of petroleum products in PUMA Energy.
5.2 The effects of ICT on SC performance of petroleum products
The first specific objective of this study was to determine the effect of ICT and its
impact on supply chain performance of petroleum products. Information Technology
is crucial to the operations within PUMA Energy this was according to the findings
that shows about 90% of respondents positively responded that ICT has high effect
on the company’s supply chain performance. This in line with Macleod (1994) said
that supply chain managers make efforts on trying to automate all SC activities from
forecasting to distribution and link every element of the SC. According to the writer
adequate ICT infrastructure would help to simplify and effectively support
information flow from one element of SC to another and result on eliminating
distortion of information between SC actors.
From the findings it was revealed that the Information and communication
technology is the source of information sharing and play a role on integrating SC
actors through information sharing, well synchronized IT infrastructures allows quick
availability of information that make possible effective and efficiency forecasting in
supply chain operations. The study conforms to (Odeny, 2011) assertion that ICT via
EDI provides and facilitate confirmation of dispatch, shipping details, bills of lading,
sending invoices and other linked information that the company chooses to exchange.
On his study the writer supported by saying the institution embraces ICT to get
accurate information and to reduce paper work.
46
Moreover, the findings revealed that PUMA use ICT platforms on provision of
timely information about sales and the quantity flow of products, transportation of
oils, in marketing as well as distribution. The company’s operations constitute an
information intensive process that deals with different kinds of data on delivery and
distribution of oils. These data include inventory, storage and transportation capacity,
sourcing, petroleum prices, sourcing options and prices, petroleum products mix and
throughput and the data on delivery to wholesale, retails and B2B points of sale. The
findings argued against (Wawuda & Mungai, 2016) findings that information
technology does not affect distribution of oil products as a part of supply chain
performance of petroleum products in Kenya as the writer found that infrastructure,
capacity and pilferage affect distribution of oil products as a result of affecting supply
chain performance of petroleum products in Kenya.
5.3 Determination of the extent of price control on SC performance of petroleum

products
The second objective of this study was to determine the extent of price control on
supply chain performance of petroleum products. Result obtained showed that price
control had significant effect on SC performance of (Sig. 0.00) which is less than
0.05 and variation of 21.5% of SC performance was affected by price control while
78.5% of variation was explained by other factors.
The findings revealed that price control affects SC performance of petroleum

products to a lower extent on PUMA energy. This implies that prices limit that are set
by regulator (Ewura) have impacts on SC performance of the company although it
does affect some activities in the company such as storage and transportation. It was
observed that prices range set by Ewura are what the company relay on although
PUMA Energy set prices by considering the fuel pump price control set by EWURA
on monthly basis.
The findings in line with (Osoro et al., 2015) showed that price control have a
significant impact on the efficiency of the supply chain management system among
oil marketing firm and countries with price control had improved their oil marketing
47
performance than those with no price control since regulator controls price by
considering the interest of stakeholders and consumers and fluctuation of demand and
supply of fuels in the market. Furthermore, the writer shows clearly that prices
controls are essential factor in determination of efficiency supply chain management.
The price limit for fuel in Tanzania are always announced by Ewura on a monthly
basis and the prices are determined by many factors such as transportation cost and
the cost of purchases that is undertaken by BPS in the country, where by the agency
purchase fuels from upstream in bulk import the quantity ordered by downstream
firms. The price of fuels fluctuates depending on upstream market forces and overall
cost of bringing the products in the country. The petroleum Act 2015, quoted price of
petroleum products is determined by the market forces but petroleum companies are
allowed to sell petroleum products at a competitive price without exceeding the price
cap (Ewura website, 2019). For this cause PUMA energy follows the criteria under
Petroleum Act when setting the price of fuels on their retail station but with
consideration of price cap.
5.4 Value added on downstream SC performance
The findings showed that outsourcing non-core activities adds value in supply chain
performance of petroleum products at a large extent the downstream flow of fuels in
PUMA Energy from traders to storage to distribution (to deports and Airports) a
finally to customers. Since 90 percent of respondents positively respond to this factor,
The Company does not undertake all the activities on their control rather they
delegate to other specialized companies for efficiency and effective outcome. PUMA
Energy outsources some activities such as transportation of fuels and lubricant so as
to deliver high quality fuel and lubricant products at a competitive price and on time.
This implies that outsourcing transportation activities and security services and other
services had high impact on supply chain performance.
Also, the findings revealed that focusing on green environment and social
responsibilities adds value on supply chain of petroleum products. PUMA Energy
ensure that they do more than achieving value for money and the right choice of the
48
products but rather guarantee creating a safe environment for staff and customers 24
hours a day. And this is done by investing in best facilities such that in retail sites
there are halogen canopy lights and well lit, secured underground storage tanks with
advanced technology. 81.1 percent of respondents agreed on focusing on green
environment add value to supply chain performance of petroleum products this in line
with the statement of one of respondent that we ensure that our products are safely to
protect our business, community and environmental interest and as a company we are
so proud of our long term safely record and our company’s regular assessment. By
protecting our products in good condition this reduces the number of incidents such
as contamination that have negative impact on the environment and making safe our
communities. This is in line with the (Kurian et al., 2018) who established that
regulatory compliance and environmentally consideration emphases green supply
chain management practices and innovation in petroleum industrial sector India. The
study also in line with (Raut et al., 2017) that found that the global climatic pressure
and ecological inadequacy of resources were determined to be the most dominant
criterion that may force the oil and gas industries to implement sustainable supply
chain management practices.
Moreover, the findings from the study revealed that among the factors that influence
value addition in supply chain of petroleum products is shorter lead time of delivery
of the products. Billie (2013) a business that delivers products or services as
promised may win customers trust that may lead to increase sales. The writer
indicated that the business may improve its financial performance by avoiding the
cost of late delivery. This is one way to increase and achieve supply chain goals are
to add value on the products or services by increasing speed of delivery. PUMA
energy ensures there is availability of their products when required to all wholesale,
retail station and aviation along its supply chain by managing well transportation and
well inventory control. The company strives to provide good service and quality
products so as to be competitive on its supply chain. This also in line with (Abdi
2012) on his study of value chain performance and the profitability of indigenous
petroleum marketing in Kenya, that due to the adoption of value chain most of
indigenous marketing firm have managed to improve delivery performance , reduces
lead time, and provision of accurate information so as to win market profitability of
oil firms.
49
In addition to that the findings showed that by serving several customers and
wholesalers all over Tanzania through establishment of many retail stations the
company supply chain performance has increased, this was revealed when
respondents agreed that the company has increase their retail sites up to 52 and 8
airports so as to reach the market targets and serves many customers.
5.5 Management system of the company
The finding shows that business management from managerial level to operational
level has impact on SC performance of the company. Respondents were asked to
answer if proper management support has positively impact supply chain
performance, poor allocation of resources in supply chain is the outcome of poor
management and lack of compliance to supply chain guidelines had negative impact
in SC performance.
Adequate facilities in SC such as storage or warehousing facilities, transport facilities

and other supply chain supportive facilities depends on good allocation of resources.
These findings in line with (Osoro, et al. 2016) that the strategic move and focus for
mass customization, quick response and high-quality services cannot be achieved
without facilities resource concern, dynamic structure of supply chain and complex
cooperation among actors.
In order to determine the effect of management system of the company respondents

were asked on how well expertise of SC performs their duties to support and boost
Company’s operations performance. One of respondents from Engineering
department said “there is less expertise on SC management that one country
supervisor on SC deals with controlling and ensure distribution of fuel and other
tasks are well performed, and this results on delays of some companies’ operation
since fewer expertise are in control.
50
CHAPTER SIX
SUMMARY, CONCLUSION AND RECOMENDATION
6.1 Introduction
This chapter aims at providing summary of the study findings; making conclusion
and recommendation about the general objective of the study. Also this chapter
shows the limitation of the study and provides a way to areas for further research.
6.2 Summary of the study findings
The general objective of this study was to assess factors that affection supply chain
performance of petroleum products. The study assessed the effects if ICT on supply
chain performance of petroleum products, the extent of price control on supply chain
performance, the effect of value added in supply chain performance as well as the
effect management system on supply chain performance of petroleum products.
The researcher employed descriptive research design with the sample size of 56
respondents which included 10 respondents from finance department, 9 respondents
from supplies department, 10 respondents from ICT department, 14 respondents from
transport and logistics department and 13 respondents from other departments. The
researcher used simple random sampling and purposive sampling techniques to select
the sample of this study. The data were collected by using questionnaire and
interview and the data were analyzed by both qualitative and quantitative approach.
The study revealed that that PUMA use ICT platforms on provision of timely
information about sales and the quantity flow of products, transportation of oils, in
marketing as well as distribution. The company’s operations constitute information
intensive process that deals with different kinds of data on delivery and distribution
of oils, for this case ICT had greatly affected supply chain performance of petroleum
products.
51
On the other objective the study revealed also price control had affect supply chain
performance to a moderate extent since prices limit set by regulator are the one
petroleum consider on setting their forecasted retail and consumers prices on which
they affect financial cost of operation, transportation, sourcing and storage of their
products.
Furthermore the study revealed that value added is so important in supply chain of
petroleum products and by considering location, sustainable environment, integration
and collaboration as well as outsourcing non-core activities so as to focus on core
supply chain activities it was revealed that the performance of supply chain affected
by value added on products through the mentioned factors. Also the findings showed
that the company had less power on supply chain management since there are
inadequate professional capacity to undertake supply chain in an effectiveness and
efficiency ways.
6.3 Conclusion
6.3.2 The effect of ICT on supply chain performance of petroleum products

From the findings the researcher concluded that as ICT is a crucial factor that affect
the overall operation of the company, the company should employ latest technology
and expertise so as to change as the market change and to ensure efficiency operation
are undertaken within the company so as to level up supply chain performance of
petroleum products within a company. That the company should employ better
storage with highly technology to avoid unnecessary loss of the business and for
assurance of accurate information about the overall business performance.
6.3.2 The extent of Price Control on supply chain performance of the company
According to the findings the researcher concluded that as price control is an
important factor that affects supply chain performance the company should utilize
bulky procurement to enhance the bargaining power and they should improve
management of cost and optimize procurement practices such as sourcing, better
negation, proper planning of deliveries and factor allocation and financial options to
52
eliminate unnecessary costs such as storage and financing costs. And also
management of the company should work closely with EWURA so as to ensure
correct information for cap prices are provided by regulator so as to ensure that the
regulator can determine and issue cap prices that make business sense.
6.3.3 The effect of Value added on downstream supply chain performance of

petroleum products
The researcher concluded that although there were few items of value added in
supply chain studied in this study such as outsourcing, green environment, location as
well as shorter lead time, but there are also some to consider such as control and
production costs.
6.3.4The Effect of Management system on downstream supply chain of the

company
It was concluded that management of supply chain activities within the firm had lack
of professionals who engaged on managing supply chain of petroleum as it has
centralized such activities to sub downstream hence lowers the performance of its
supply chain.
6.4 Policy Implication
Based on the study conclusion, the researcher suggested that there should be
facilitation of excellence partnership and alliances which can enhance the use of
higher level technologies and build up capacity of the company.
On the other hand EWURA should put closer monitoring and supervision of the
policy guidelines to ensure all laws and polices enforced on oil firms are followed in
accordance.
53
6.5 Recommendation
The researcher came up with the recommendation that the management should focus
on improving the use of ICT as an important factor which by taking it into
consideration the level of supply chain performance will be improved. Also the
company should invest on latest technology to support the operations and win to
serve the community at the front line and ensuring efficiency operations within the
company.
Also the government needs to establish alternative ways of allowing petroleum

companies to source and import their own products to the suppliers of their own
choices and to manage their own prices depends on the cost of the business they incur
in each stage of their supply chain as to enable them to get quality and cheap products
of their choices.
Also researcher recommended that EWURA should not be publishing the cap prices
that every oil company could follow instead leave the market forces to determine the
prices of oils. And the agency should only intervene when the companies charges
higher prices than the expected prices to cover their costs.
Furthermore, the company should focus more on to expand the business by allocating
more retail station to serve as many customers in order to add value on their supply
chain hence leveling up supply chain performance of the company.
The study also recommended establishment of strong collaboration and networking

platform that facilities may share real time information between supply chain and
eliminate bullwhip effects when necessary.
6.6 Limitation of the study and suggestion for further study
This study was conducted in PUMA Energy as one of many petroleum entities in
Tanzania, so this study was limited only on one petroleum entity and this was limited
due to financial and time constraints. More results findings would be possible where
there is extension of study to include a survey on more than five petroleum
companies who are the big players in oil marketing so as to understand further their
54
level of supply chain performance and how they compete with their supply chain to
other competitors. Hence further studies can be conducted to other agencies such as
Ewura, BPS and TBS to understand more on petroleum pricing, petroleum quality
and sourcing from upstream to sub- downstream supply chain.
Therefore, the researcher invites all interested researchers in this field to assess other
factors affecting supply chain performance of petroleum products in Tanzania.
55
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61
APPENDICES
RESEARCH QUESTIONNAIRE
I am Perazia R. Magesa, a candidate pursuing Masters of Science in Procurement and

Supply Chain Management of Mzumbe University Dar es Salaam Campus. The
following questionnaire has been designed to obtain information that will help me in
assessing Factors affecting Supply Chain perfomance of Petroleum Products in
Tanzania. The provided information will be kept at the maximum secrecy and no one
will be mentioned by name upon responding to this questionnaire.
SECTION A: BACKGROUND OF INFORMATION
Just put a (√) tick on the correct answer
1. Indicate your gender
a) Male [ ]
b) Female [ ]
2. Age
a) 18-30 [ ]
b) 31-40 [ ]
c) 41-50 [ ]
d) 51years and above [ ]
3. For how long have you worked at PUMA Energy?

a) 0-4 [ ]
b) 5-9 [ ]
c) 10-14 [ ]
d) 15 and above [ ]
4. Please indicate the department you’re working in.

a) Logistics and transportation [ ]
b) HR and Administration [ ]
c) Finance [ ]
d) other department [ ]
5. What is the level of your education?
a) Certificate [ ]
b) Diploma [ ]
c) Degree [ ]
d) Masters [ ]
62
SECTION B. SUPPLY CHAIN OF PETROLEUM PRODUCT
6. To what extent does ICT affect SC Performance of petroleum products?
Great extent [ ]
Moderate extent [ ]
Little extent [ ]
7. Please indicate your level of agreement based on your experience working with
the company on the question related to price control rating in scale of 1-strongly
disagree, 2-disagree, 3-Not sure, 4-Agree & 5-strongly agree
What is the effect of ICT on supply chain performance of petroleum products in

PUMA Energy?
Items Strongly Disagree Not Agree Strongly
disagree sure agree
i. ICT helps management to

achieve integration and
effective information
sharing
ii. ICT enhance
collaboration by
connecting organization
needs and communicate
in due time
iii. ICT helps in making the
firms processes
transparent and lead to
better business practice
iv. ICT adoption allowed the
firm to act more
efficiently on provision
of customer services both
retail and B2B
v. PUMA Energy has
customer relationship
management systems that
resolves quickly
customer complaints
63
8. To what extent does price control has improve petroleum SC Performance?
Great extent [ ]
Moderate extent [ ]
Little extent [ ]
Please indicate your level of agreement based on your experience working with
the company on the question related to price control rating in scale of 1-disagree,
2-Not sure and 3-Agree
disagree sure agree
vi. Price control has affected

storage of petroleum
products
vii. Price control of oil had
affect transportation in
SC
viii. Price system of
petroleum has affected
by price control
ix. Fluctuation of Currency
exchange rate and
purchases price affects
the performance of SC.
x. Price control have
positively affected SC
performance
64
9. To what extent do value added improving SC performance of the company?
Great extent
Moderate extent
Little extent
Please indicate your level of agreement based on your experience working with
the company on the question related to value added rating in scale of 1-disagree,
2-Not sure and 3-Agree
disagree sure agree
i. Focus on green
environment and
provision of social
service improved SC
performance
ii. Supply chain
coordination helps in
improving SC
Performance
iii. Well aligned value
added system improves
SC performance
iv. Shorter lead time adds
value in supply chain
v. Outsourcing non-core
activities add value on
SC performance
10. Please indicate the level of company’s SC performance compared to other

companies with similar products based on previous year information. The rating
is from 1= High, 2= Medium, 3= low and 4= Normal.
SC output Strongly Disagree Not Agree Strongly
performance of disagree sure agree
petroleum
products
i. Sales
ii. On time delivery
iii. Customer
complaints
iv. Order fill rate
65
SECTION C: INTERVIEW GUIDE
MANAGEMENT SYSTEM OF THE COMPANY
8. Do you have any idea about supply chain?

a) Yes ( )
b) No ( )
9. Is the supply chain management team having sufficient transportation?

a) Yes ( )
b) Not sufficient ( )
10. How do you rate the level of performance of SC Expertise of the company
a) Good ( )
b) Excellent ( )
c) Average ( )
d) Poor ( )
11. Does the company have good facilities allocation that supports supply chain
activities?
a) Yes ( )
b) No ( )
c) Not Sure
12. How do you rate the delivery activities at your company?
a) Good ( )
b) Excellent ( )
c) Very effective ( )
d) Average ( )
66
13. What are the supply chain channels in PUMA Energy Tanzania Ltd?
i. ……………………
ii. …………………….
iii. ……………………..
iv. …………………….
v. ……………………
14. How does information flows from one targeted market to another in PUMA
Energy?
……….............................................................................................................................
.........................................................................................................................................
......................................................................................................................................
15. How does Information Technology assist distribution of petroleum products in

PUMA Energy Tanzania Limited?
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
What re the challenges the company face on creating value in its supply chain?
(i) ……………………………………………
(ii) ……………………………………………
(iii) ……………………………………………
(iv)……………………………………………
(v) ………………………………………….
END OF THE QUESTIONNAIRE

THANKS FOR YOUR CO-OPERATION.
67

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ASSESSMENT ON THE FACTORS AFFECTING

DOWNSTREAM SUPPLY CHAIN PERFORMANCE

A CASE OF PUMA ENERGY TANZANIA LIMITED

A CASE OF PUMA ENERGY TANZANIA LIMITED

A dissertation submitted in partial/fulfillment of the requirements for Award of

Affecting Downstream Supply Chain Performance of Petroleum

Major Supervisor Dr. Paul M. Nsimbila

Accepted for the board of

DEAN/DIRECTOR, FACULTY/ DIRECTORATE/SCHOOL/BOARD

B2B- Business to Business

Table 3.1: Sample composition..................................................................................26

Figure 2.1: Conceptual Framework............................................................................23

This chapter contains background information, statement of the problem, research

1.2 Background Information

1.3 Statement of the Problem

Regardless of the significance of the petroleum industry in daily lifecycle of

1.4 Objectives of the Study

1.4.1 General objectives

1.4.2 Specific objectives

1. What is the effect of ICT on supply chain performance of petroleum in

1.6 Scope of the Study

1.7 Significance of the Study

1.8 To the Organization

The study findings were beneficial to organization’s management and officers to

1.9 Organization of the Study

2.2 Definition of Concepts and Terms

2.2.1 Supply Chain

2.2.2 Upstream supply chain

2.2.3 Downstream Supply Chain

Downstream supply chain of petroleum products involves processing refineries,

2.2.6 Information Communication technology (ICT)

ICT relates to all techniques used in the leadership of telecommunications,

2.2.7 Price control

Step 2: Determination of demand and customer behaviors such as price sensitivity,

2.3 Theoretical Review

2.3.1 Transaction Cost Theory

Transaction cost theory focuses on how transaction is organized externally or

2.3.2.2 Rational choice theory

2.3.3 Resources Based view

2.3.4 Agency theory

2.3.6 Theory of efficiency

2.4.2 Worldwide Context

2.4.3 Africa Context

The research undertaken by oil companies in Kenya on the variables influencing

Econometric data analysis on supply chain system performance in the petroleum

Ngoto (2016) conducted a study on factors affecting supply chain management

2.4.4 Tanzania Context

2.4.5 Summary and knowledge gap

The effective government policy on supply chain management of petroleum is a

Independent variables Dependent variable

Source: Researcher’s construct (2019)

Figure 2.1: Conceptual Framework

3.2 Type of the study

According to Kothari (2004) research design is an arrangement of conditions for

3.3 Study area

3.5 Unit of analysis

3.6 Variables and their measurement

Kothari (2010) defined measurement as a process of assessing numerical values to

3.7 Sample size and sampling techniques

3.8 Sample size

Table 3.1: Sample composition

S/N Departments Population Sample Percentage

Researcher drew sample by using simple random sampling technique as it refers to