The state-owned Guyana Oil Company Limited (GuyOil) has recorded lower sales for the first half of the year.
The news in the recently released half-year report of Government’s performance would come after GuyOil complained that smuggling and other factors have been eating at its bottomline.
The report said that at the end of the period under review, GuyOil recorded a cash surplus of $979.8M, an improvement from a cash deficit of $811.5M in the first half of 2018.
While that itself may sound good, on the sale side of things, it started to become worrying.
According to the half-year report, total receipts were $19.5B, $1.3B lower than the same period in 2018.
The Ministry of Finance explained: “This was a direct result of lower sales volumes of fuel products, which fell by 62,461 barrels below the first half of 2018. Mogas, Kerosene and Gasoil sales were 35,701 barrels, 4,632 barrels and 33,624 barrels lower than 2018, respectively.”
GuyOil had blamed price competition and the contamination of a shipment of Super 95 Gasolene in February 2019 and overall declining sales.
The company assured that a market plan is in place to address this, and includes public outreaches, volume discounts and a dealers’ rebate programme.
The situation of GuyOil’s sales have been under scrutiny for a number of years now amid evidence of significant smuggling and direct competition to the company.
Significant sales to the ‘gold bush’ and hinterland locations have accounted for a big slice of the fuel market to smugglers and other private individuals who have been granted import licences.
It was reported in December that GuyOil lost ground in its gasoline sales in 2017, thanks to smuggling among other things.
In its 2017 Annual Report, it was reported that net profit had decreased almost 29 percent.
GuyOil competes mainly with SOL and Rubis.
The company’s business involves the importation, storage, distribution and marketing of motor gasoline, gasoil, kerosene, fuel oil, and Castrol lubricants.
The products are distributed through the large network in the petroleum business in Guyana, comprising 52 dealer-owned, dealer-operated, and eight company-owned, company-operated service stations.
Its three terminals are at Adventure, Region Two; Providence, East Bank Demerara and Heathburn, Berbice.
Since the loss of the Venezuela supplies in 2015, Guyana had turned to the Petroleum Company of Trinidad and Tobago (PetroTrin) refinery in Trinidad which is the main supplier of Mogas, Gasoil, Kerosene, and Jet A1; and Staatsolie Maatschappij, Suriname.
It is now reportedly sourcing from Jamaica.
According to Chairman Mark Bender’s report of 2017, “Despite the increasing manifestation of smuggled/illegal fuel and the increased number of licensed private importers, GuyOil maintained its dominant position in the Guyana market and continued to be the leader in stabilising fuel prices, to the benefit of the Guyanese consuming public and industries.”
According to the sales revenues, in 2017 sales were $35.259B, compared to $31.939B in 2016, an increase of $3.32B or 10.39%. Cost of sales was $30.465B compared to $25.889B in 2016, an increase of $4.576B or 17.68 percent.
With regards to the sales volumes, GuyOil managed to reach 1,309,093 barrels compared to 1,287,211 barrels in 2016, an increase of 21,882 barrels or 1.7 %.
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