Botswana is beginning to feel the ripple effects of the Libyan conflict. The government on Monday announced retail pump prices increases for petrol, diesel and paraffin by 10 thebe a liter with effect from Tuesday.
The government attributed the price adjustment to an increase in crude oil prices internationally due to the shutdown of the Libyan production, coupled with fears that the unrest might spread to Saudi Arabia and other oil producing countries.
Crude oil prices averaged US$96.052 per barrel in January subsequently rising to an average of US$106 per barrel in February, a 10.4 percent increase in the cost of crude oil prices. Crude oil prices reached a monthly peak of US$119.80 per barrel.
“Where necessary, fuel prices will be increased by small margins regularly to avoid a once off high increment, which could have an immense impact on inflation,” said Permanent secretary in the Ministry of Minerals, Energy and Water Affairs, Boikobo Paya.
According to the PS, the government will continue to closely monitor the prices of petroleum products in both regional and international markets and ensure that the adjustments are carried out appropriately.
“We should brace ourselves for higher inflation for as long as the Middle East crisis. It is very unlikely that we will have fuel shortages. However, what we are guaranteed is higher fuel prices,” says local market analyst at Stockbrokers Botswana, Mosimanegape Mothibi.
┬áThe local analyst says there is very little that can be done by the government regarding the increase in fuel prices not even subsidies. “Subsidies have limits. So there is not much we can do if the supply is stretched,” says Mothibi.
International media outlets were this week beaming footage showing the US carrying out airstrikes in Libya in coalition with Britain, France, Italy and Canada following a United Nations resolution authorising military action. 
Botswana severed diplomatic ties with Libya last month protesting the use of lethal force on civilian protesters by Muammar Gaddafi’s regime.
