PART 1
BILLY SEKGOROROANE *
During its past sitting the Parliament hurriedly passed the Botswana Energy Regulatory Authority (AMMENDMENT) Bill 2022.
The bill sought to achieve just three things;
1.0 Classification of fuel imports as commercial stock and strategic stocks.
2.0 Creating what’s called a public body per the Act.
3.0 Empowering the Minister to authorize the public body to import fuel stocks and establish import quotas in favour of the public body.
To understand what the Act wants to achieve, one has to first understand how the petroleum industry is currently operating. The Botswana fuel market is roughly 1.3 billion litres a year all of which is imported primarily from South Africa.
The different Oil Marketing Companies ( Puma, Engen, Total , Caltex etc.) independently source their supplies to meet local retail and commercial demand.
About 10 years ago Botswana government established its own oil company known as Botswana Oil, whose mandate was two fold; ensuring security of fuel supply and facilitating active citizen participation in the petroleum industry.
To achieve its main mandate of ensuring security of supply, Botswana Oil had to build adequate in-country storage facilities to hold strategic fuel reserves. It must be noted that to facilitate this, the government introduced what is called security of supply levy at 17.5 Thebe per liter in the fuel pricing structure from July 2017.
Botswana Oil has therefore collected up to BWP 1.2 billion for this purpose, but has still not built any new storage facilities. Botswana Oil has therefore continued to fail in its first mandate.
On its second mandate of promoting active participation of citizens in the industry one just has to ask how they are going about this when they as an organization are failing to meaningfully participate in the industry. Basically, who are their customers and what do they (Botswana Oil) do?
What the Organization intended to do, but the Regulator (BERA) denied them, was to become a super wholesaler without infrastructure. They wanted to be licensed to become the sole importers of fuel into the country, so as to supply the local Oil Marketing Companies, which would have immediately given them access to procurement and transportation of 1.3 billion litres of fuel a year for just being a middleman.
The question we asked ourselves then was what was Botswana Oil and the Ministry trying to achieve? Will giving an inexperienced entity without adequate infrastructure and international or regional support structures an exclusive mandate for the importation of fuel into the country support its security of supply objective? Fortunately BERA saw through this and denied the application.
After licking it’s wounds, Botswana Oil went back this time asking to be given a quota of the local supply to import, unfortunately it appears the law as it was, was against them.
The question to be asked then is why does Botswana Oil (which is now classified as a public body) want to import fuel for resale to the Oil Marketing Companies at all costs, while still failing to deliver on its core and most critical mandate.
Quite clearly the amendments have nothing to do with helping Botswana Oil achieve its mandate. How MP’s let this ammendment pass is shocking.