Oil marketing firms’ profits fall on lower fuel demand

Muscat - 

Oman’s oil marketing companies recorded sharp declines in their profits for the first quarter of 2017, mainly due to a fall in retail volume demand.

However, the sultanate’s all three oil marketing firms - Oman Oil Marketing Co, Al Maha Petroleum Products Marketing Co and Shell Oman Marketing – recorded significant growths in sales revenues due to higher retail prices of petrol and diesel at the pump.

The combined net profit of all three firms fell 21 per cent to RO6.48mn for the quarter ended March 31, 2017, compared with RO8.19mn in the corresponding period of the previous year.

Shell Oman Marketing on Sunday reported a 24.3 per cent decline in first quarter net profit at RO3.05mn compared with RO4.02mn in the same period of 2016. Its quarterly revenues jumped by 31.8 per cent to RO110.34mn from RO83.69mn in the previous year.

Shell Oman Marketing in its quarterly report said the decline in net profit is ‘mainly attributable to lower volumes in lubricants, continuous decline in retail volume demand and a one-off significant item recorded in the first quarter of 2016’. It added that volumes were lower than 2016 due to changing market demand patterns.

Oman Oil Marketing, the sultanate’s biggest in terms of turnover, last week posted a 12 per cent decline in net profit for the first quarter of 2017 at RO1.86mn. This compares with a net profit of RO2.12mn for the same period of previous year. Oman Oil Marketing’s sales revenue in the first quarter grew 29 per cent to RO118.89mn compared with RO92.49mn in the same period a year ago.

Al Maha Petroleum’s net profit fell by 23 per cent to RO1.57mn in January – March period this year from RO2.05mn in the same period of 2016.

‘Retail sales growth in terms of volume is affected by the decreased demand due to a significant increase in pump price during the period’, Al Maha Petroleum said in its quarterly report. It added that commercial sales growth is largely affected by the decreased demand from major customers and fierce competition in this segment.

Al Maha Petroleum’s sales revenue increased by 20 per cent to RO101.05mn in the first quarter, mainly on account of significant increase in domestic fuel prices during the first quarter this year compared to last year.

Despite softening retail demand, oil-marketing companies said they will stick to their long-term strategies to invest in retail networks and introduce new filling stations.

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