Nigeria’s main oil companies have made a lot of money thanks to a recent government decision to remove subsidies on fuel. This change let these companies operate more freely in the market, leading to big financial gains.
In the first nine months of 2024, four major oil companies reported a combined revenue of N1.3 trillion from selling fuel to Nigerians. Even though importing fuel is expensive, costing them about N833.86 billion during that time, they still managed to make a gross profit of N465.92 billion from petrol sales.
The companies involved include Total Energies Marketing Nigeria, MRS Oil Nigeria, Eterna Plc, and Conoil Plc. They were able to make more than double their profits compared to last year, thanks to the subsidy removal.
In May 2023, the government announced that subsidies would be eliminated, which caused petrol prices to rise significantly. Since then, prices have gone from about N200 per litre in late May 2023 to over N1,060 per litre by November 2024. This change has resulted in higher revenues and profits for these oil companies.
In total, the four companies shared a profit of N45.3 billion after taxes, which is a 146% increase compared to N18.5 billion the previous year. A closer look at their finances shows that they spent nearly N834 billion to import fuel between January and September 2024, which is almost double what they spent in the same period last year.
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Total Energies spent the most on fuel imports, with N234.68 billion, a huge increase from N126.88 billion in the previous year, yet their revenue jumped to N634.1 billion from N326.38 billion. This meant they made a profit of N399.4 billion, doubling what they earned last year.
Conoil, Eterna, and MRS Oil also reported increases in their profits and revenues. Eterna, for example, spent N179.51 billion on importation and made N203.18 billion in revenue, nicely up from last year’s N98.49 billion in imports and N109 billion in revenue. Similarly, MRS Oil spent N199.14 billion and earned N217.98 billion.
These companies reported that their monthly earnings have increased by about 200% compared to before the subsidy removal. However, they also noted that this policy raised the financial demands on them significantly, affecting their ability to manage working capital and increasing their borrowing costs.
In contrast, some manufacturers faced losses due to rising energy costs, spending N550.36 billion on fuel purchases, which was up by N282.92 billion from the previous year.
Additionally, the oil firms are currently owed a total of N36.56 billion from the government related to costs incurred in transporting fuel to retail stations. TotalEnergies is owed the most, with N22.68 billion.
This situation highlights the financial impact of removing subsidies and signifies a shift in how the oil market operates in Nigeria, with potential effects on consumers and the broader economy.
