Oil Marketers Reshape Debt Strategies as H1 Profits Improve Despite High Interest Rates
Nigeria’s oil marketers are adopting different debt strategies as stronger first-half profits compete with high interest rates and changing fuel demand.
By GLEBM News Desk
Nigeria’s listed oil marketing companies are taking sharply different approaches to managing debt and financing as improved earnings collide with high borrowing costs and changing demand in the downstream petroleum market.
An analysis of the first-half financial results of Conoil Plc, Eterna Plc and TotalEnergies Marketing Nigeria Plc shows that the three companies are responding differently to the same challenging financing environment.
While all three recorded stronger profits during the period, Conoil increased its reliance on debt, Eterna strengthened its balance sheet through an equity raise, while TotalEnergies reduced borrowings to lower finance costs.
The companies’ combined finance costs stood at ₦18.51 billion in the first half of 2026, down 5.2 per cent from ₦19.52 billion recorded in the same period last year.
However, the aggregate figure masks significant differences among the companies.
Conoil increased its bank overdraft by 31.2 per cent to ₦72.05 billion by June 2026, compared with ₦54.90 billion at the end of 2025. Its effective borrowing rate remained around 32 per cent.
Despite the higher financing burden, Conoil’s profit after tax surged 473 per cent to ₦5.15 billion, supported by stronger revenue and gross profit.
Eterna adopted a different strategy, raising approximately ₦18.97 billion through an equity issue. The additional capital helped the company reduce total borrowings by 57.5 per cent to ₦29.45 billion.
TotalEnergies also reduced its exposure to debt, cutting its finance costs significantly during the period.
The contrasting strategies highlight how companies are adjusting their balance sheets to cope with elevated interest rates while trying to preserve profitability.
The changes are taking place as the downstream petroleum market continues to adjust following the removal of fuel subsidies and increased domestic refining activity.
Higher petrol prices have also affected demand. Industry data indicate that petrol consumption declined by about 52 million litres, or 0.56 per cent, during the first half of 2026.
For oil marketers, the combination of deregulation, higher financing costs and changing consumer demand is forcing companies to reconsider how they fund inventories, manage working capital and allocate capital.
The results suggest that stronger profits alone may not be enough to guarantee financial resilience. Companies that can reduce borrowing costs and strengthen their balance sheets could have greater flexibility to withstand future market volatility.
