Oil Marketers Are Making Losses, Closing Shop —MOMAN

Crude oil
  • Oil Marketers Are Making Losses, Closing Shop —MOMAN

The Major Oil Marketers Association of Nigeria has said most oil marketing companies in the country are running at a loss, while many have closed shop as a result of the “tough operating environment.”

The new Chairman, MOMAN, Mr Adetunji Oyebanji, while speaking on Thursday at a press briefing in Lagos, described the nation’s downstream oil industry as being “in serious trouble.”

MOMAN, which is one of the oil marketers’ associations, comprises Oando Plc, Forte Oil Plc, Total Nigeria Plc, MRS Oil Nigeria Plc, Conoil Plc and 11 Plc (formerly Mobil Oil Nigeria Plc).

Oyebanji said, “It looks like once there is petrol and there are no queues [at filling stations], everybody is happy. The health of the industry that is making the fuel available is also important. If you are not worried about it and the industry continues on a downward trend, then we are facing a situation whereby one day, things will get very bad and we end up having only a national oil company because all the other entities have closed shop.

“Today, many of the players in the industry, not necessarily MOMAN, have closed shop; now people are divesting while some people are closing shop.”

The Petroleum Products Pricing Regulatory Agency noted last week that due to challenges of Premium Motor Spirit pricing in the fourth quarter of 2017, oil marketing companies withdrew from the importation of the product.

It said the NNPC as the supplier of last resort stepped in to bridge the supply gap and had since then ensured the adequate supply of the product to meet domestic demand.

Oyebanji, who is the managing director, 11 Plc, said private marketers would only resume importation when “it makes economic sense to do so.”

He said, “Ultimately, if the regulated environment does not change, then our ability to import is going to be dependent on the numbers. Does it make economic sense to do it? If it doesn’t make economic sense, it will be difficult and we will remain under the status quo.”

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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