Three major marketing companies take lubricant and fuel products from the Oman Refineries and Petrochemicals Company and distribute them to retail, commercial and aviation customers across the sultanate. The market they share is a fiercely competitive one, but the most recent figures reveal a healthy sector with capacity for growth.
First Entrant
Shell Oman Marketing Company, established in 1958, was the first of the three to enter the market. It is something of an anomaly within the Shell family, being a public company that is 51% quoted on the stock market, while Shell retains a minority share of 49%. As well as using its branding, the firm is wholly operated by Shell, and has a national network of pumping stations. According to its 2011 annual report, retail business accounted for the bulk of its turnover (53%) in 2011, followed by commercial fuels (17%), aviation fuels (16%) and lubricants (14%). Despite risky competition in the aviation segment, the company retained its contracts and added a few more, including supply for Oman Air at Muscat International Airport, which it gained for a two-year period, and the Arab Airlines members group for one year, along with a two-year extension of its exclusive operating concession at Salalah Airport. The company’s performance was negatively affected in 2011 by regional unrest that limited its lubricant export business, as well as the timing of some payable amounts that resulted in a higher than normal amount being paid in the calendar year. As a result, income generated from operating activities stood at OR8.4m ($21.89m), a decrease of OR8.1m ($21.01m) from the previous year. Net profit for the year therefore showed a modest decline, from the OR13.99m ($36.4m) of 2010 to OR12.60m ($32.8m). However, results for the nine months ended September 2012 showed that cash from operations was OR11.41m ($29.7m) compared to OR4.03m ($10.5m) for the same period last year, and the company’s sale revenues and volumes grew 11% compared to the previous year. In September 2012 net profit was reported to be OR9.58m ($24.9m), compared to OR10.57m ($27.54m) in the same period in 2011, around 9% lower.
Major Players
Al Maha Petroleum Products Marketing Company entered the market in 1993 and now operates the largest retail network in the country, with over 171 service stations, four of which were added in 2011. The company also saw an increased turnover in its commercial business, which it attributed to a growing number of infrastructural projects in Oman, as well as its commercial airlines activity. Its future plans, according to its 2011 board of director’s report, focus on the development of its infrastructure and improvement of its customer care capability. According to the September 2012 chairman’s report, despite some sluggish growth, the company reported a 16% increase in sales in the period from January to September 2012, reaching OR31.3m ($81.5m). Net profits also saw impressive growth at OR8.5m ($22.1m), marking a 24% increase over the same period in 2011, hitting OR8.5m ($22.1m).
Aviation Supplies
The Oman Oil Marketing Company, better known as Omanoil, was formed in 2003 and quickly established itself as a market leader. Since 2004 it has supplied fuel to the Royal Air Force Oman, and in 2009 it significantly expanded its aviation business by winning the supply contracts for Turkish Airlines, Thai Airways, Saudia Airlines, Royal Jordanian and Kuwait Airways. On the retail side, by 2007 it had expanded its filling station network to cross the 100 mark, and as of 2012 it stands at 132 units. This growth has been accompanied by an expansion of it convenience stores, a total of nine of which were added in 2011. It has also established successful partnerships with fast food chains such as Burger King and Dunkin Donuts. Commercial business was buoyant over 2011, recording a 26% rise, according to its annual report. The performance of its lubricants over the year, however, was mixed. Future growth in this sector is expected to come from its company brands, Maximo and Optimol, which Omanoil intends to market heavily in the short term.
