Sunday, May 29, 2022

Fuel Prices go up again

Botswana’s households and businesses will have to endure another assault on their disposable incomes and recurrent budgets as fuel prices continue to rise. On Tuesday, the Botswana Energy Regulatory Authority (BERA) stoked inflationary pressures as it announced another upward price adjustment for petrol, diesel and paraffin in a space of three months.

On Monday the regulator made adjustments to fuel pump prices, with unleaded petrol 93 price increasing by 126 Thebe per litre while unleaded petrol increased by 125 Thebe. Diesel retail price will also go up by 149 Thebe, while paraffin prices will increase by 174 Thebe.

The Energy Regulator last introduced a fuel and oil price increase in December 2021, with retail pump price of fuel averaging P1.65 thebe/litre and diesel increased by P1.75 thebe/litre. The Authority explained at the time that the need to increase was due to the need for regular price adjustment to manage unit rates and the cumulative debt to oil companies.

BERA says the Tuesday increase of pump prices is necessitated by the general increase in international crude oil prices. Brent crude oil prices continued to soar during February 2022 averaging US$94.10 per barrel from US$85.57 recorded in January 2022.

The latest price increase will nudge inflation rate to go up, reflecting more added costs of living. Other inflationary pressures will come from government administered prices such as electricity and ministerial services fees.

Consumer Inflation in Botswana which has been trending at nine-year highs since mid-2021 rose to 10.6 percent in January 2022, from 8.7 percent in December 2021, according to the latest Consumer Price Index (CPI) figures shared by Statistics Botswana this past week.

The upward movement has been directly linked to fuel prices hike which was approved by the energy regulatory body – BERA in the last week of December 2021.

According to Statistics Botswana, the rise in inflation between December 2021 and January 2022 also reflects an increase in public transport fares as reflected by the annual price changes for Transport (from 18.3 to 26.7 percent), and private school fees in January 2022. 

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