While a slump in oil prices is normally a cause for celebration for consumers and some businesses in fuel-guzzling countries, in Botswana the same is not with “immediate effect”.
The regulator of prices of fuel in the country – BERA says it has decided not to react frequently to global oil prices variations, thus allowing room to take other factors into consideration.
BERA CEO – Rose Seretse says, “Global oil prices are monitored on daily basis and the effect of movement of these prices (the decline in this case) is reflected as unit over recoveries in our petroleum products pricing formula known as the Basic Fuel Pricing Model.”
According to Seretse, these international oil prices inform where local prices are compared to the actual cost of a petroleum product.
Despite adopting this model, Seretse admits that lower pump prices can support the economy for a consumer country such as Botswana.
She cautions that, “However, it is worth noting that we do not have the same price adjustment approach as Namibia and South Africa. We are of the view that the model we have works well for Botswana.”
In the meantime, BERA says prices are currently being reviewed and appropriate decisions will be taken and if necessary, the prices adjustment will be made once the exercise is complete.
On storage, the energy regulator says the country has got limited storage capacity. The strategy for now is to make sure that all the strategic storage facilities are filled up.
“Just like all other countries, Botswana must build self-sufficiency across all sectors of the economy, including energy. Therefore, efforts are ongoing to beneficiate our immense coal resources through the Coal to Liquids Project driven by our Botswana Oil. We also must improve our strategic fuel storage capacity, which is currently being looked into by Botswana Oil”, says Seretse.