The Managing Director of the company, Mr. Alexis Vovk, who delivered a paper at the just-concluded OTL Africa Downstream 2013 Expo in Lagos, decried the persistent delays in the payment of marketers’ subsidy claims, adding that this had constituted a heavy financial burden to the company.
Specifically, he said the company’s net income, which was 75 per cent of its operating income in 2011, had dropped to less than 50 per cent in 2013, and he maintained that delayed subsidy payments were responsible for this.
Vovk said, “One cannot but mention the situation that importers have found themselves in terms of payment of subsidies. In the last 18 months, payments have been delayed over and over resulting in heavy financial expenses. As an example, two years ago, Total’s net income was 75 per cent of its operating income. In 2013, it is less than 50 per cent.”
The Major Oil Marketers Association of Nigeria had in July 2013 threatened to stop the importation of petrol due to the non-payment of their N40.6bn subsidy claims by the Federal Government.
According to a document on the status of outstanding subsidy claims made available to our correspondent, the Federal Government still owes Total a subsidy claim of N1.66bn.
The major marketers said they were losing a lot of money in bank interests and foreign exchange.
“Today, the companies work for the banks but not for their shareholders. It has to be addressed. I commend the government for having dealt with the scam on imports in 2012, but compliant companies should not be penalised, they should actually be congratulated and supported,” Vovk added.
He said this was one of many challenges affecting the downstream oil subsector, adding that the rising wave of insecurity in the country had also significantly driven up the cost of operation vis-à-vis the protection of people and assets.
Vovk explained that Total Nigeria had in the past three years invested over $100m (N15bn) on expanding its downstream operations.
According to him, the investments cover importation, storage and distribution of petroleum products, such as fuels or specialties products like lubricants and LPG through retail, industrial and aviation channels of sales.
He said, “Total Nigeria has a long term view in Nigeria and this is emphasised by the level of our recurring capital expenditure. Over the last three years, we have invested more than $100m, and the pace should be sustained.”
He also said that the company would, in the next four years, increase its retail outlet network with 60 new stations.
“Though we are not putting it in the press, by 2017, we expect to have an additional 60 stations under our brand to bring our network to over 600 stations. We are also rebranding our entire network giving them a new visual identity to replace our current red stations,” he added.
In view of the huge investment channelled into the business, the Total Nigeria boss highlighted the company’s asset base as three class fuel storage facilities, five aviation storage facilities, three lubricant blending plants, five LPG filling centres and more than 550 service stations nationwide.
Information from Punch was used in this report.