Thanks to the withdrawal of subsidies, Nigeria’s leading oil marketers listed on the Nigerian Exchange (NGX) were able to successfully manage growing operating costs and achieve a nine-month net profit gain of over 100 percent year over year.
Major oil marketers saw an increase in revenue and earnings as a result of the partial and complete elimination of subsidies in May 2023, which raised petrol prices. Since late May 2023, the price of gasoline has been around 200/liter; by November 2024, it had risen to nearly 1000/liter.
TotalEnergies Marketing Nigeria, MRS Oil Nigeria, Eterna Plc, and Conoil Plc are the downstream oil firms that are listed on the NGX. The four businesses reported a combined profit after tax of N45.3 billion for the nine months that ended on September 30, 2024. This is a noteworthy 146 percent year-over-year increase over the N18.5 billion reported for the same period in 2023.
With N27.4 billion net profit during the nine months, TotalEnergies Marketing Nigeria reported the biggest profit of any oil marketer. This is a 153 percent year-over-year increase from the N10.8 billion net profit reported in 9M 2023. With N793.9 billion in revenue, the company also had the largest revenue of any downstream oil company during that time.
Total’s sales exceeded the N422.6 billion earned in 9M 2023 by 88% year over year.
Conoil, which reported a net profit of N11.3 billion in 9M 2024—a 30 percent year-over-year increase from the N8.7 billion net profit reported in 9M 2023—came in second to TotalEnergies. Conoil’s revenue for the period was N249.1 billion, an 81 percent increase over the N137.9 billion it made during the same time in 2023.
Compared to the N100.9 billion in sales reported in 9M 2023, MRS Oil reported N248.7 billion in revenue for the nine months, a 147 percent year-over-year increase. MRS reported a net profit of N6.2 billion, up 81% year over year from the N3.4 billion net profit reported in 9M 2023, on top of a gross profit of N18.8 billion.
With a net profit of N338 million for the first nine months of 2024, Eterna also recovered to profitability. This is a 108 percent year-over-year increase from the N4.5 billion net loss reported in the same period in 2023. The business’s revenue for the period was N233.8 billion, which was 90 percent higher than the N123.3 billion it reported for the same time in 2023.
Fuel price increases brought on by the elimination of petrol subsidies in 2024 accounted for the majority of these companies’ reported revenues. For instance, Conoil’s gasoline income increased from N133.6 billion as of 9M 2023 to N244.5 billion, an 83 percent year-over-year increase. Compared to the N86.2 billion earned in 9M 2023, MRS Oil’s revenue from PMS alone for the nine months was around N218 billion, representing a 153 percent year-over-year increase.
These enterprises incurred a cumulative operating expense of N79.1 billion for the nine months, compared to N48.6 billion in 9M 2023. This profit improvement was despite a 63 percent increase in operating expenses.
With N56.8 billion in operating expenses over the reviewed period, TotalEnergies Marketing Nigeria incurred the highest operational costs, up 71% from N33.1 billion in 9M 2023.
Nonetheless, MRS Oil experienced the largest increase in operating expenses, which rose from N4 billion as of 9M 2023 to N7.1 billion over the course of the nine months, a 77 percent increase.
As of 9M 2023, Eterna’s operating costs were N6.4 billion, although they increased somewhat by 5% year over year to N6.7 billion. Conoil’s operating costs increased from N5.1 billion in 9M 2023 to N8.4 billion in 9M 2024, a 66 percent year-over-year increase.
Sharp increases in distribution or administrative costs were the primary source of the increase in operating expenses since freight costs increased significantly year over year due to the high cost of petrol and diesel. For instance, Conoil spent N4.1 billion on distributions throughout the nine months, which is 189 percent more than the N1.3 billion it spent in 9M 2023.
The company’s distribution expenses were driven by freight charges, which came to N3.9 billion. MRS Oil Nigeria reported freight costs that were less than half of Conoil’s for the nine-month period while having a comparable capacity. Compared to the N1.03 billion reported in 9M 2023, MRS’s freight expense of N1.75 billion represented a 69 percent year-over-year rise.
Administrative expenses accounted for the majority of MRS’s operating costs, rising from N3.5 billion in 9M 2023 to N6.4 billion, an 83 percent year-over-year increase. In addition to freight charges, the company’s marketing and distribution expenditures rose from N538 million as of 9M 2023 to N796 million, a 43 percent year-over-year rise.
The company’s fuel expenses for office use over the nine months was N829.8 million, a 126 percent year-over-year increase from the N367.8 million recorded last year. This increase in the price of petrol was also seen in MRS’ administrative petrol costs.
Administrative expenses accounted for the majority of TotalEnergies’ operating costs, rising from N29.2 billion in 9M 2023 to N45.3 billion in 9M 2024, a 55 percent year-over-year increase.
Nonetheless, the impact of growing gasoline prices was noticeable, as the cost of product transportation increased by 189% year over year to N11.5 billion from N4 billion during the same period in 2023.
One noteworthy finding regarding TotalEnergies was the N6.6 billion spent on consulting throughout that time. Compared to the N1.7 billion spent on a comparable item during the same period in 2023, this represents a 293 percent increase year over year.
Eterna’s operational expenditures were similarly primarily driven by administrative costs; the business spent N6.4 billion on the item, while its selling and distribution costs came to N285.6 million.
As the corporations sought to shore up their petroleum product stock, their inventories increased cumulatively over the nine months under investigation. The four businesses, with TotalEnergies at the forefront, spent N78.6 billion over the course of the nine months to increase their inventory stock.
TotalEnergies invested N67.7 billion to boost its inventory from N73.9 billion at the beginning of the year to N141.2 billion. However, Conoil invested N14.5 billion to strengthen its stockpile, while Eterna disposed off almost N5.3 billion worth of its stock.
In addition to selling fuel, these businesses also manufacture lubricants. Fuel still accounts for more than 90% of their income, though.
It is unclear how direct petrol sourcing will affect these companies’ bottom lines given the October start of PMS production at the Dangote refinery and signs that NNPCL will no longer be Nigeria’s only petrol importer.
Presently, Eterna Plc is a member of the Depot and Petroleum Product Marketers Association of Nigeria, whereas Conoil Plc, TotalEnergies Marketing Nigeria, and MRS Oil are members of the Major Oil Marketers Association of Nigeria (MOMAN).
