Wesbank

BOL monopoly poses risks - Engen

SHARE   |   Tuesday, 19 June 2018   |   By Kabelo Adamson
Engen filing station, [INSERT] Engen MD Chimweta Monga Engen filing station, [INSERT] Engen MD Chimweta Monga

Giving exclusive license to Botswana Oil Limited (BOL) to import 100 percent of all petroleum products brought into the country could have resulted in decreased energy supply security.

This is according to one of the leading downstream petroleum company, Engen Botswana Limited Managing Director, Chimweta Monga.

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Writing in Engen Botswana’s latest annual report, Monga said the Petroleum Supply Bill which was proposed to enhance energy security and facilitate active citizen involvement in the petroleum industry, sought to give BOL– a state-owned company – sole rights to import all petroleum needs of the country.

Monga said Engen, along with other industry players, expressed reservations at turning this proposed piece of legislation into a law. He said as industry players they believe that this could result in decreased, rather than increased energy supply security, competition and increased costs.

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However, as recent as last month, the local energy regulator, Botswana Regulatory Authority (BERA) turned down an application by BOL to be given exclusive rights by the regulator to become the sole importer of all relevant products in the industry.

The rejection by BERA to give BOL exclusive rights was premised mainly on the failure by BOL to demonstrate its financial and technical ability to handle such as a license if awarded.

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BOL’s mandate include among others ensuring security of supply of fuel products into Botswana, the diversification of fuel from the traditional sources of supply, promotion of citizen owned entities to participate in the petroleum sector in Botswana and maintenance of strategic fuel reserves for the country.

The arrival of BERA has been welcomed by industry players, including Engen Botswana Limited whose chairman, Shabani Ndzinge hailed it as a development that will facilitate the transformation of the petroleum industry in Botswana.

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“BERA is tasked with providing a regulatory framework for the industry to ensure that appropriate standards are complied with and that continued investment in the petroleum sector is sustained while ensuring that the interests of consumers of petroleum products are protected,” Ndzinge said.

He said as Engen Botswana, they stand ready to cooperate with government and other industry players to ensure that Botswana’s long-term fuel supply security is guaranteed.

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Meanwhile, Ndzinge said during the course of 2017, they initiated a series of engagements with government of Botswana requesting them to urgently settle the accumulated slate under-recovery that had accrued during the period January 2016 to December 2017.

“This became necessary in order to ensure the continued financial stability of the sector and to avoid possible disruption of the supply of fuel into the country through the failure of local oil companies paying their suppliers,” said Ndzinge, adding that their expectation is that the matter would be resolved soon without delay.

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This is also stressed by Monga who explained that a number of suggestions have been advanced to the government in order to resolve this matter.

Monga said discussions are underway to settle the slate under-recovery that is due to the petroleum industry in order to avoid disruption of the supply of fuel into the country.    



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