Abstract:
The purpose of this study was to examine and evaluate the operational risk management practices in petroleum filling stations in Kenya. The accompanying research question, that guided the study are: What are the typical Operation Risks for Petroleum Filling Station; what are the Challenges against Management of Operation Risk for Petroleum Filling Station and finally Best Practices for Managing Operation Risk in Petroleum Filling Station.
The study adapted a descriptive quantitative research design. A sample of 100 was selected from a population of 291 Petroleum Filling Stations. The tool for collecting data was the questionnaires. Data analysis was based on both descriptive statistics (frequencies and percentages) and also inferential statistics that include correlation tests. The Statistical Package for Social Sciences (SPSS) was employed for analysis.
From the findings of the study, Most of petroleum filling stations in Nairobi County have embraced the operational risk management best practices which include risk identification, assessment, and mitigation and monitoring, this has resulted to reduced abnormal losses. Majority of station owners, dealers and managers have domesticated best practice of operational risk management and have effectively felt the impact of a minimized ORM challenges.
The analysis revealed that the compliance to best practices of ORM is not only good for success in the operations as a business enterprise in terms of a positive bottom line but also for protection of all stakeholders including customers.
Similar study should be carried out in other counties to evaluate the consistency of the operation risk management in Petroleum filling stations and oil industry as a whole. A further study should focus on the causes of abnormal fuel losses and their remedies between the deport and the stations that end up contributing to the losses in petroleum filling stations.
