Deregulation Dividends: Oil & Gas Companies Soar Post-Subsidy Removal
️ Sector Focus: Petroleum (Downstream) / Oil & Gas Marketing
Performance Snapshot: Q1 2025
Did You Know?
Since Nigeria officially removed fuel subsidies in Q3 2024, downstream oil companies have posted record profits, reduced borrowing, and are thriving in the open market.
Here’s what that means—and why it matters:
The Numbers Don’t Lie
• Combined Turnover of 7 key players jumped by 66.2% to ₦2.98 trillion in Q1 2025 (from ₦1.79 trillion in Q1 2024).
• Profit Before Tax (PBT) grew by 42.1% to ₦334.6 billion.
• Finance Costs dropped by 36.3% as companies borrowed less from banks.
• Total Borrowings fell by ₦400 billion, down 16.2% from ₦2.47 trillion to ₦2.07 trillion.
Companies Covered:
• Seplat Energy
• Total Energies
• Eterna
• MRS Oil
• Aradel
• Oando
• Conoil
MRS Oil had zero borrowings in Q1 2025—an impressive feat.
What’s Driving the Boom?
✅ Deregulation (Subsidy Removal):
Companies can now price products based on market dynamics, boosting profit margins.
✅ Reduced Bank Dependence:
High interest rates pushed companies to cut borrowing—finance costs dropped drastically.
✅ Capital Efficiency:
Operators turned over capital quickly and passed rising costs to consumers, thanks to the inelastic demand for petroleum products.
✅ Local Sourcing Advantage:
With Dangote Refinery ramping up, firms are reducing FX risks and improving access to supply.
Expert Insights
David Adonri (Highcap Securities):
“Deregulation helped firms pass rising costs to customers. Higher turnover of capital enabled them to outperform inflation.”
Olatunde Amolegbe (Ex-CIS President):
“With deregulation, firms set their own prices. They’re more profitable now—and better positioned for long-term gains.”
Ambrose Omordion (InvestData):
“The spike in revenue is also driven by higher-margin products and improved logistics. Ease of movement is contributing too.”
Outlook for 2025?
Analysts Predict More Growth:
• Stable fuel distribution since Q3 2024
• Healthy margins and cost optimization
• Rising investor confidence and dividend expectations
Final Take
Nigeria’s long-awaited subsidy removal has finally unlocked real value for investors in oil & gas marketing stocks. Companies like Oando, Seplat, and Total are now operating leaner, smarter, and more profitably in a deregulated environment.
️ Sector Focus: Petroleum (Downstream) / Oil & Gas Marketing
Performance Snapshot: Q1 2025
Did You Know?
Since Nigeria officially removed fuel subsidies in Q3 2024, downstream oil companies have posted record profits, reduced borrowing, and are thriving in the open market.
Here’s what that means—and why it matters:
The Numbers Don’t Lie
• Combined Turnover of 7 key players jumped by 66.2% to ₦2.98 trillion in Q1 2025 (from ₦1.79 trillion in Q1 2024).
• Profit Before Tax (PBT) grew by 42.1% to ₦334.6 billion.
• Finance Costs dropped by 36.3% as companies borrowed less from banks.
• Total Borrowings fell by ₦400 billion, down 16.2% from ₦2.47 trillion to ₦2.07 trillion.
Companies Covered:
• Seplat Energy
• Total Energies
• Eterna
• MRS Oil
• Aradel
• Oando
• Conoil
MRS Oil had zero borrowings in Q1 2025—an impressive feat.
What’s Driving the Boom?
✅ Deregulation (Subsidy Removal):
Companies can now price products based on market dynamics, boosting profit margins.
✅ Reduced Bank Dependence:
High interest rates pushed companies to cut borrowing—finance costs dropped drastically.
✅ Capital Efficiency:
Operators turned over capital quickly and passed rising costs to consumers, thanks to the inelastic demand for petroleum products.
✅ Local Sourcing Advantage:
With Dangote Refinery ramping up, firms are reducing FX risks and improving access to supply.
Expert Insights
David Adonri (Highcap Securities):
“Deregulation helped firms pass rising costs to customers. Higher turnover of capital enabled them to outperform inflation.”
Olatunde Amolegbe (Ex-CIS President):
“With deregulation, firms set their own prices. They’re more profitable now—and better positioned for long-term gains.”
Ambrose Omordion (InvestData):
“The spike in revenue is also driven by higher-margin products and improved logistics. Ease of movement is contributing too.”
Outlook for 2025?
Analysts Predict More Growth:
• Stable fuel distribution since Q3 2024
• Healthy margins and cost optimization
• Rising investor confidence and dividend expectations
Final Take
Nigeria’s long-awaited subsidy removal has finally unlocked real value for investors in oil & gas marketing stocks. Companies like Oando, Seplat, and Total are now operating leaner, smarter, and more profitably in a deregulated environment.