Botswanan firms face petrol price increase

9 February 2011
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9 February 2011 | Nick Martindale

Businesses in Botswana could face higher fuel prices after the government was forced to find alternative sources to its traditional supplies in South Africa.

In an exclusive interview with SM, Potso Thari, a spokesperson for the Ministry of Minerals, Energy and Water Resources, said the government was looking at new sources of supply – including from Angola, Mozambique, Namibia and Zimbabwe – which could ultimately increase the price of petrol.

Thari said supply shortages had been caused by a variety of factors, including planned maintenance on South African refineries and the reduced operational capacity of the Durban-Gauteng pipeline.

“Some refineries such as Engen and Sasol had planned shutdowns for maintenance during October and November 2010,” said Thari.

“The unavailability of products from these refineries and the slowing down of the pipeline by 20 per cent has resulted in reduced supplies coming into Botswana since the end of October 2010.”

“Demand in the Gauteng area, which includes supplies to Botswana, is increasing, and will also result in future fuel shortages in Botswana as less fuel will be exported from South Africa,” she said.

The immediate supply shortage is likely to continue until March. Around 99 per cent of Botswana’s petrol is currently imported from South Africa through various multinational oil companies.

Thari also confirmed the government is in discussions with Mozambique’s state-owned fuel company Petromoc over the procurement of emergency supplies of petrol, worth around BWP 300 million (US$43.8 million). The move has already been approved by the Public Procurement and Asset Disposal Board.

She said: “Currently there has not been any adjustment to pump prices. But it should be noted that the use of alternative routes of supply is more expensive than the traditional route of South Africa so fuel prices may be affected in the future.

“The fuel price adjustment is influenced by international crude oil prices, the development of the petroleum product prices locally and exchange rate movements.”  

The move to identify alternative sources of supply follows the announcement by minister (and now acting vice-president) Ponatshego Kedikilwe in January that the government intends to create the country’s first national oil company.

Earlier this year, the government was forced to issue reassurance that the oil supply would not run dry and released a further 6.4 million litres of fuel from stockpiles to the oil industry, on top of an earlier batch of 11 million litres.

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