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Oil marketing firms in Nigeria post N7.06bn annual profit decline

Most of the major players in the downstream sector of the nation’s oil and gas sector saw their profits drop last year, according to official data collated by our correspondent on Wednesday.

An analysis of the financial statements of five of the seven oil marketing companies listed on the Nigerian Stock Exchange showed a total drop of N7.06bn in their profits.

Only Conoil Plc was able to grow its profit in 2019.

Total Nigeria Plc, a subsidiary of French oil major Total Group, suffered a 70 per cent drop in its profit after tax. It declined from N7.96bn in 2018 to N2.42bn.

Total is the only international oil company operating in the downstream sector of the Nigerian oil and gas industry.

11 Plc, formerly known as Mobil Oil Nigeria Plc, saw its profit after tax dip by five per cent to N8.85bn last year from N9.32bn in 2018.

The United States-based ExxonMobil divested its 60 per cent stake in Mobil Oil Nigeria in 2017 to Nipco Plc, an indigenous Nigerian downstream oil and gas company.

MRS Oil Nigeria Plc posted a profit after tax of N1.13bn last year, compared to N1.26bn in 2018.

Eterna Plc’s profit after tax plunged to N85.52m in 2019 from N1.01bn in the previous year, its annual reports showed.

Conoil grew its after-tax profit to N1.98bn last year from N1.79bn in 2018.

Forte Oil posted a profit of N5.25bn in the nine-month period ended September 30, 2019, compared to N348m in the same period in 2018.

Last month, oil marketers in the country called on the Petroleum Products Pricing Regulatory Agency to increase margins on the product now to prevent a collapse of the nation’s fuel distribution system.

According to the petrol pricing template of the PPPRA, margins for retailers and dealers are N6 and N2.36 per litre while transporters’ allowance is N3.36 per litre.

Top officials of the Major Oil Marketers Association of Nigeria and the Independent Petroleum Marketers Association of Nigeria told our correspondent that a review of the margins was overdue.

The Chief Executive Officer and Executive Secretary, MOMAN, Mr Clement Isong, said the current margins were limiting marketers’ ability to invest in new trucks and the upgrade of filling stations.

He said, “We need the PPPRA to look at our margins now. It is taking too long and our members are declaring losses. It can’t last longer than this. It has been too long.

“Increased margin today is not a luxury; it is a necessity, otherwise your fuel distribution system will collapse. It is collapsing already.”

He said the margins could be increased without causing any change in the pump price of petrol.

Isong said, “Currently, the price is N145 – which means that the government is funding the difference between the expected open market price (about N182) and the N145.

“If our margins are increased, it just means that the government will be funding more. Because you want to keep the distribution system working, if you don’t do something, the trucks will stop running.

The Federal Government on May 11, 2016 announced a new petrol price band of N135 to N145 per litre, a move that signalled the end to fuel subsidy payment to private marketers.

The PPPRA also reviewed some of the components of the pricing template then. The retailers’ margin was increased from N5 per litre to N6; dealers’ margin rose from N1.95 to N2.36 and transportation cost increased from N3.05 to N3.36.

Source: Punch