Some of the major downstream oil and gas marketing firms in Nigeria jointly posted N776.6 billion as revenue in the nine-month period of 2021, growing their top line by 34% from N579.59 billion recorded in the corresponding period of 2020.
The list includes some of the major oil marketers quoted on the Nigerian stocks exchange.
The listed oil and gas firms recorded stellar performances in their top and bottom lines between January and September 2021, posting a recovery from the covid dented 2020, which left some of the companies with net losses. What does the data say?
A breakdown of the data shows that profit after taxes surged astronomically in the review period wiping out the losses from the previous year. Notably, net profit increased from a loss position of N30.87 billion in the 9-months period of 2020 to a profit of N30.57 billion in 2021.
Ironically, the positive performance recorded by the firms did not reflect at the macro level where the sector contracted by 12.65% (year-on-year) in Q2 2021 following a 2.21% decline recorded in the previous quarter.
In terms of the contribution to the aggregate GDP, the oil sector contributed 7.42% to the GDP in Q2 2021, a decline compared to 9.25% in the prior period.
This is partly due to the fact that Nigeria’s downstream sector pales in comparison to the upstream sector when it comes to market size and export potential. Nigeria’s export of crude has remained subdued all year due to OPEC quota and challenges at the port of exports. Lubricant sales drive revenue growth
A further breakdown of the components of their revenue reveals revenue from the sales of lubricants was the major driver of growth in the review period. This is on the back of significant increases recorded in the price of lubricants across the country.
Notably, Nairametrics reported that the price of engine oil increased by at least 70% between January and September 2021, which was attributed to the scarcity of base oil in the global market and a consequent supply crunch in the country.
A lubricant specialist interviewed during the period explained that the increase in the cost of lubricant in the country is majorly due to the scarcity of the primary production material, which is base oil. Speaking further, Engr. Anu said, “Due to the covid-19 lockdown in most European countries, base oil became scarce and as such, Nigeria could not import, hence […]
