Effect of inland petroleum transport risk management strategies on financial performance of oil marketing companies in Kenya
Date
2015
Authors
Gaicuhie, Charles Thuo
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
Risk management is an integral part of day-to-day business activities in the energy
industry. Oil and gas companies face a myriad of risks in today's global marketplace.
Uncertainty in the inland oil transport is expensive, and its impact affects the way its
customers are served. Despite increase in use of risk management strategies in oil
marketing companies’ management, there have been scanty empirical studies that have
focused on determining the effect of inland petroleum transport risk management
strategies on financial performance of oil marketing companies in Kenya. The objective
of this study was to establish effect of inland petroleum transport risk management
strategies on financial performance of oil marketing companies in Kenya. The study
adopted descriptive survey research design to describe the general characteristic of the
study population and show the relationship between the dependent and independent
variables. The descriptive research design was deemed fit to establish the effects of
inland transport risk management strategies on financial performance of oil marketers in
Kenya. The target population was 50 oil marketing companies in Nairobi with activities
on transporting and marketing petroleum products in Kenya. The study had a sample size
of 75 respondents who were managers, risk management officers, depot managers,
financial officers and operation officers selected using stratified sampling technique. The
study collected primary data using questionnaires. The data was then analyzed using
descriptive and inferential statistics. Descriptive statistics included frequency,
percentages, means and standard deviations. For qualitative data, which was mainly
gathered from open ended questions a qualitative data checklist was developed.
Inferential statistics involved multiple regression model which was applied to determine
effects of inland transport risk management strategies on the financial performance of oil
marketing companies in Kenya. The study established that there existed a significant
positive relationship between risk based internal audit and financial performance of Oil
marketers companies. The study found that risk identification had a significant positive
impact on financial performance of Oil marketers. Assessment of risks and internal audit
annual plans are significant risk based audit items in inland oil transport to the
achievement of financial goals. The study revealed that there existed a significant
positive relationship between risk planning and financial performance of Oil marketers
and a significant positive relationship between portfolio quality and financial
performance of Oil marketers.
Description
Submitted in partial fulfillment of the requirements for the degree of Master of Business Administration
Keywords
Petroleum, Oil Marketing Companies, Marketing, Financial performance, Risk management, Risk management strategies