Conoil Plc, one of the downstream firms listed on the Nigeria Exchange Group, announced its half-year unaudited reports for the period ended 30 June 2023, with strong improvement seen in its top and bottom lines, mostly attributed to the removal of subsidy by the current federal administration.
Revenue for the half-year period ended June 2023 rose by 54.9 percent to N87.14 billion in contrast with N56.24 billion as of June 2022. Event with the cost of sales increasing by 51.2 percent to N74.94 billion at half-year 2023, as against N49.58 billion as of June 2022, gross profit for the period rose by 83 percent to N12.20 billion by June 2023 compared with N6.67 billion realised by June 2022.
Conoil Plc revenue came mainly from white products and lubricants. Revenue from white products rose by 66.3 percent to N84.28 billion as of June 2023 as against N50.69 billion as of June 2022.
On the other hand, lubricants generated lesser revenue at half year 2023. In 2022, Conoil made N5.56 billion while in 2023, revenue from lubricants fell to N2.86 billion at half year 2023.
In terms of market share, the market size of white products, compared to lubricants, increased from 90 percent as of June 2022 to 97 percent as of June 2023. Lubricants’ market share fell to 3 percent at half year 2023 as against 10 percent as of June 2022.
Total assets increased to N81.28 billion at half year 2023, up from N65.91 billion at the corresponding period of 2022. Total liabilities rose to N50.01 billion at half year 2023 as against N40.89 billion at half year 2022.
On assumption of office, President Tinubu announced the removal of subsidy on premium motor spirit otherwise known as petrol. In reflection of market realities, the retail price of petrol rose from an average of N250 per litre to N511. As the crude oil prices increased, the retail price of petrol was further raised to N617 per litre.
“According to the World Bank, Nigeria’s total revenue in 2000 was $10.8 billion. By 2010, this amount increased to $67.9 billion. Yet the Nigerian government has spent over $30 billion on fuel subsidies over the past 18 years. This has had a significant impact on funds available for critical infrastructure and other essential sectors such as education, health, and defence,” PwC said in its research report published in May 2023.
“The porous borders between Nigeria and neighbouring countries have created an enterprise for smugglers who purchase large volumes of petrol at a subsidised rate in Nigeria and sell at market prices in neighbouring countries,” PwC added.
Majority of the stakeholders who are well-familiar with the downstream sector have said that the removal of subsidy on petrol is not only a welcome development, it will serve as a catalyst for investment inflows into the nation’s energy sector.
“Currently, Nigeria imports its refined petroleum products due to limited or no domestic refining. According to Blackgold, Nigeria’s total import for petroleum products is about $28 billion per annum. This makes the country’s fuel price not only dependent on global oil prices and exchange rates, but also importation and handling charges. Local refining is therefore expected to reduce Nigeria’s dependence on imports and potentially stabilise petrol prices,” PwC said.
