The intensifying competition between Dangote Refinery and petroleum importers is exerting pressure on Nigeria’s oil and gas stocks, triggering a notable downturn in market performance. As fuel prices continue to decline, investor confidence in the sector is waning, raising concerns about revenue projections for 2025.
Market Impact: NGX Oil and Gas Index Declines 7%
As of March 12, the NGX Oil and Gas Index has dropped by 7%, reflecting a widespread decline across key industry stocks. With the exception of Eterna Plc, all major downstream players have seen their share prices tumble, dampening expectations for revenue growth this year.
MRS Oil Nigeria, a key partner of Dangote Refinery, has declined 18.3% year-to-date, while Conoil Plc has fallen 14.5% from its peak of N387.20. TotalEnergies Marketing, Nigeria’s largest petrol retailer, has lost 8.74% despite delivering robust financial results in 2024.
Stock Performance: A Deeper Look
While some analysts attribute the downturn to profit-taking, Dangote Refinery’s aggressive price cuts appear to be a more significant factor.
- MRS Oil Nigeria: The stock began the year at N217.80 after delivering a 105% return in 2024. However, it dropped 25% in January, briefly rebounded in February, and then slumped again following Dangote’s price cut announcement. It has since recovered slightly to N178.
- TotalEnergies: Despite reporting a record N1.04 trillion in revenue for 2024, the stock has struggled to sustain investor confidence, posting an 8.74% decline in 2025.
- Eterna Plc: Defying the downward trend, Eterna has surged 56.4% year-to-date after a 99% gain in 2024, demonstrating resilience in the face of declining fuel prices.
Petrol Prices and Industry Revenue Trends
The volatility in fuel prices has significantly impacted revenue projections across the industry. In 2024, petrol prices surged from N670 per litre in January to N1,250 in November, boosting profits for oil marketers. However, with Dangote Refinery entering the market and the naira strengthening, prices reversed in December, falling to N899.50 per litre by year-end.
The price surge in 2024 allowed several downstream companies to post record revenues:
- TotalEnergies: Revenue hit N1.04 trillion, with net profit soaring by 115% to N27.8 billion.
- MRS Oil: Revenue grew by 71% to N312.2 billion, while net profit rose 61% to N6.5 billion.
- Eterna Plc: Revenue climbed 71% to N313.6 billion, turning a N9 billion net loss in 2023 into a N3.2 billion net profit.
- Conoil: Revenue increased by 60.5% to N323.1 billion, with net profit rising 15% to N11.4 billion.
2025 Outlook: Cautious Projections Amid Price Declines
With petrol prices now falling, oil companies are adjusting their earnings forecasts:
- TotalEnergies expects a 23% drop in H1 2025 revenue, forecasting N405.5 billion, down from N529.9 billion in H1 2024.
- Eterna Plc projects a 10% revenue decline, estimating N132.5 billion for H1 2025 compared to N147.5 billion a year prior.
- MRS Oil remains optimistic, forecasting a 63% revenue increase in Q1 2025, though achieving this target remains uncertain with petrol prices now at N860 per litre.
Industry Concerns: Economic Implications of Falling Prices
While some analysts suggest increased sales volumes could offset revenue losses, petroleum retailers warn of potential financial strain. The Petroleum Retail Owners Association of Nigeria (PETROAN) has raised concerns about price volatility, cautioning that continued declines could lead to layoffs and broader economic instability.
“Price fluctuations are disrupting business growth and could result in job losses,” said PETROAN spokesperson Joseph Obele.
As the industry navigates a shifting pricing landscape, Nigeria’s oil and gas sector faces a critical juncture—one that could redefine profitability and investor sentiment in the months ahead.
