Most of the major fuel marketers in the country have released their financial results for the first quarter of 2020 which showed losses and significant declines in profits.

Three of the seven oil marketing firms listed on the Nigerian Stock Exchange posted a total loss of N1.57bn in the three months ended March 31, 2020, while two saw their profits fall by N3.58bn.

MRS Oil Nigeria Plc reported the biggest loss in the quarter under review, as its loss rose by 45.21 per cent to N1.06bn from N730.64m in the same period a year ago. Its quarterly revenue rose year-on-year to N17.87bn from N13.51bn, according to its unaudited financial statements obtained from the NSE.

Total Nigeria Plc, a subsidiary of French oil major, Total, posted a loss of N163.22m for the quarter ended March 31, 2020, down from the N474.09m loss recorded in the same period a year ago. Its unaudited financial statement showed that its revenue dropped to N70.24bn in the period under review from N77.42bn in the same period in 2019. Total is the only international oil company still operating in the downstream sector of the Nigerian oil and gas industry.

Eterna Plc made a loss of N265.89m in Q1 2020, compared to a profit of N530.09m it recorded in the same period last year. The firm’s revenue plunged to N17.49bn in the period under review from N60.47bn in Q1 2019.

Ardova Plc, formerly Forte Oil Plc, saw its profit after tax tumble by 85 per cent for the three months ended March 31, 2020. The firm said its after-tax profit dipped to N497.44m in the quarter from N3.32bn in the same period a year ago.Its unaudited interim financial statements, however, showed that quarterly revenue increased year-on-year to N52.05bn from N42.56bn.

In June 2019, Ignite Investments and Commodities Limited became the majority shareholder in Forte Oil after the former majority shareholder, Mr Femi Otedola, divested its full 75 per cent direct and indirect shareholding in the company. The company’s name was changed to Ardova in January 2020.

11Plc, formerly known as Mobil Oil Nigeria Plc, saw its profit after tax plunge by 37 per cent for the three months ended March 31, 2020. Its after-tax profit fell to N1.28bn in the quarter under review from N2.04bn in the same period a year ago, while profit before tax dipped to N1.91bn from N3.02bn. The United States-based ExxonMobil sold its 60 per cent stake in Mobil Oil Nigeria in 2017 to NIPCO Investment Limited, a wholly-owned subsidiary of Nipco Plc in 2017.

“If you, as an investor, had invested in one of the quoted companies on the NSE involved in the downstream oil sector, your investment over 10 years would have turned negative,” the Chairman, Major Oil Markers Association of Nigeria, Mr Adetunji Oyebanji, said during the recent Nigeria Petroleum Downstream Consultative Summit held online.According to him, many of the players, particularly depot owners, have had their businesses foreclosed and their assets are with the Asset Management Corporation of Nigeria, leading to job losses.

Oyebanji noted that over the last 10 to 15 years, virtually all the multinational players involved in the downstream had divested and exited the downstream oil sector in Nigeria. “Even some of the entities that bought over those assets have themselves divested. If all these don’t tell you that there needs to be some radical change in the industry, I don’t know what else tells the story beyond all these things,” he said. He said the sector, like every other aspect of the nation’s economy, needed significant investment.

Oyebanji, who is the Managing Director/Chief Executive Officer of 11Plc, said, “What is going to bring about that investment is having a fully deregulated industry where there is a level playing field and everybody can grow at their own pace and based on their own efficiency and operational strength. “So, we would encourage the government to really take the bold steps, not only by getting out of the issue of subsidy but going the whole hog by fully deregulating the industry.” The sharp drop in crude oil prices on the back of the spread of coronavirus saw the landing cost of petrol hitting a record low in March, wiping off subsidy on the product.

The pump price of petrol, which is still being regulated by the Federal Government, was reduced to N125 per litre from N145 per litre on March 18, 2020, effective March 19.

The Petroleum Products Pricing Regulatory Agency announced on March 31 a price band of N123.50 to N125 per litre, effective April 1. It announced a new price band of N121.50 to N123.50 on May 31.

“The recent introduction and implementation of an automatic fuel price formula will ensure fuel subsidies, which we have eliminated, do not reemerge,” the Federal Government told the IMF in the letter dated April 21, 2020.

Until recently, the Nigerian National Petroleum Corporation has been the sole importer of petrol into the country for more than two years, after private oil marketers stopped importing the commodity due to crude price fluctuations, among other issues.

“With the NNPC taking over almost 100 per cent of imports until recently, and then fixing very low margins for operators who take these products for distribution, a lot of the depot operators have not been able to continue to operate,” the Chairman, Depot and Petroleum Products Marketers Association of Nigeria, Mrs Winifred Akpani, said at the webinar.

The NNPC announced on May 6, a reduction in the ex-depot price of petrol from N113.28 per litre to N108 per litre across all its products loading facilities as well as in its throughput operations.

by ‘Femi Asu