Despite the passage of a year since Covid19 struck the Sultanate with devastating economic consequences, fuel consumption – an important indicator of economic activity -- still remains well below pre-pandemic levels, much to the unease of the country’s fuel marketing companies.
All three of Oman’s leading fuel marketers have reported continued impacts to retail and bulk fuel sales due to pandemic-induced factors, chiefly closures and mobility restrictions, switch to work-from-home mode, sluggish consumer demand, and the uncertain economic outlook.
“The Covid-19 pandemic and associated consumer behaviour have negatively impacted economic activity, thereby resulting in lower demand for fuel products and services,” said Oman Oil Marketing Company (Oomco), a subsidiary of OQ – the Sultanate’s integrated energy group – in the Directors’ Report for the quarter ended March 31, 2021.
“The company is closely monitoring the situation to manage the potential business disruption on its operations and financial performances and will take the appropriate required actions,” the report stated.
Group turnover declined seven per cent to RO 122.56 million during Q1 2021 versus RO 131.62 million for the same period in 2020. Net Income for the period slumped 16 per cent to RO 699K in 2021 compared with RO 602K in 2020.
Al Maha Petroleum Products Marketing reported a significant 19 per cent drop in total sales amounting to RO 81.7 million for the quarter, down from RO 100.4 million for the corresponding period of 2020. It attributed the difference to the “continuing impact of the Covid-19 pandemic on commercial activities”.
The company’s retail business, which is an important source of revenue, suffered from the “restricted closure of commercial activities”, resulting in operational challenges and a decrease in demand, it said. The commercial segment too was impacted by the pandemic “as businesses continue to experience sluggish demand and cash-flow constraints”. Aviation sales suffered the most due to continued restrictions on international travel, it said.
Dr Juma Ali Juma al Juma, Chairman, however, voiced optimism that the outlook, while currently worrying, is expected to improve on the back of the government’s vaccination drive.
“The unexpected resurgence of the Covid-19 pandemic is a serious concern and poses serious challenges threatening the growth of many industries. However, the vaccination drive that is being undertaken nationwide is expected to contain the spread of the pandemic and bring the hope of normalcy during the next year,” he stated in the Chairman’s Report for the quarter.
Shell Oman Marketing Company posted a 21.4 per cent decline in Q1 revenues reaching RO 92.754 million this year, compared with earnings for Q1 2020. However, the gross profit for the quarter was RO 7.874 million, 15.7 per cent higher than the same period last year mainly “due to the impact inventory value stock movements as a result of the increase in petroleum product prices,” the company said, adding that the three-months profit and comprehensive income amounted to RO 1.6 million.
“The first three months of 2021 remained challenging as the effects of the Covid-19 pandemic and the economic slowdown continue to impact both the industry and the country,” added Walid Hadi, Chairman, Shell Oman Marketing Company SAOG, in the Directors’ Report for the quarter.
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