Friday, July 10, 2020

Botswana Oil seeks Moagi to open fuel taps to meet demand

The Covid-19 pandemic with its associated restrictions on trade has forced Botswana Oil Limited (BOL) to look elsewhere for alternative fuel suppliers to meet a surge in demand.

BOL’s fuel supplier, SASOL, can only supply the country with contracted 2 million litres of fuel while demand stands at 16 million litres.

In addition, the BOL chief executive officer (CEO) Meshark Tshekedi seeks the Minister for Mineral Resources, Green Technology & Energy Security Lefoko Moagi to release 8 million litres of fuel from government strategic reserves to mitigate supply shortages.

“Due to the COVID-19 pandemic, there are currently supply challenges out of South Africa. In the early stages of the pandemic, the challenge was on diesel product but has since escalated to include petrol grades, particularly the unleaded petrol grade (ULP93). Sasol (BOL’s main supplier) could only confirm loading of contracted volumes of 2 000 000 litres while the market required much more (16 000 000 litres),” Tshekedi said.

BOL has also sought approval from Moagi to procure fuel from alternative routes to meet market demand and avert dry outs.

To balance the sudden surge in demand with supply, BOL has secured volumes from 5 million litres of diesel from Namibia 3.9 million litres of diesel from Mozambique.

“The final plan is to deliver Mozambique volumes by Rail into Francistown depot while volumes from Namibia are to be delivered into Gaborone depot through road trucks,” said Tshekedi. Botswana Oil Limited chief executive officer (CEO) Meshark Tshekedi said SASOL can only supply of contracted volumes of 2 000 000 litres while the market required much more (16 000 000 litres).

He stated that Botswana imports and consumes about 1.3 billion litres of petroleum products per annum, most of which is imported from South Africa, with limited quantities from Namibia and Mozambique. He said up to 90 percent of these imports are handled by International Oil Companies with limited volumes imported by a few local companies. He admitted that over the years the country experienced product shortages due to various challenges in South Africa, either due to product supply disruptions or civil strife posing security of supply risk.

“BOL’s spend since the COVID-19 pandemic started stands 95 percent local spend. For this period BOL has engaged 30 trucks from 6 different citizen companies to haul product from Namibia,” said Tshekedi.

He also stated that BOL is at an advanced stage of enrolling citizens to transport product out of South Africa, which has not been possible to date. He further said that the main objective for creating the company was to have a government arm in the oil and gas sector as well as to address a number of challenges experienced by the country in the sector, especially intermittent fuel supplies in the country which were mostly experienced during public holidays and other travel intensive periods.

Tshekedi stated that to further ensure security of supply in the country, the government, through BOL is embarking on several major projects such as Tshele Hills Storage Facility Development, Francistown Depot Expansion, Ghanzi Depot Development and Gaborone Truck Staging Centre.

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Sunday Standard July 5 – 11

Digital copy of Sunday Standard issue of July 5 - 11, 2020.