Page 5 - AfrOil Week 28 2020

AfrOil COMMENTARY AfrOil
As such, they could not maintain exports to Botswana at previous levels. e latter country usually consumes 3mn litres per day (lpd) of petroleum products and sources about 90% of the total from South Africa, with the remaining 10% coming from neighbouring Namibia and Mozambique.
Mmetla Masire, the permanent secretary of Botswana’s Ministry of Mineral Resources, told News24 at the weekend that South African fuel shipments were down by more than 65%. “We are now receiving about a third of our normal supply,” he said.
Supplies were already running low by late June, when BOL’s CEO Meshack Tshekedi told reporters that o cials in Gaborone were tak- ing steps to stave o shortages. He explained that Botswana’s government had authorised the withdrawal of 8mn litres of fuel from the national reserves and had also given BOL per- mission to purchase petroleum products from other countries, including Mozambique and Namibia.
New problems
Despite these e orts, though, shortages have emerged.
is is partly the result of developments in South Africa – speci cally, a truck drivers’ strike. is ongoing labour action, which began on July 7, has led to further reductions in deliveries of fuel to Botswana. But it is also related to a public health policy requiring truck drivers to go into quarantine for 14 days a er crossing the border into Botswana. is mandate has helped curb infection rates in that country, but it has also created serious bottlenecks along cross-border transportation routes.
In the meantime, many government o cials in Gaborone say hoarding and panic buying have made the shortfalls more acute. As Min- ister of Mineral Resources, Green Technology and Energy Security Lefoko Moagi told Bot- swana Daily News in a recent interview: “We have recently experienced a supply/demand mismatch caused by panic buying by motorists, which worsens the situation. I want to advise Batswana that they should only fuel their vehi- cles and avoid stockpiling it at home, [owing] to safety risks.”
Moagi was speaking shortly a er Vice-Pres- ident Slumber Tsogwane spoke out against hoarding, saying that automobile owners should not seek to purchase more fuel than they needed. He also criticised the practice of pumping gaso- line or diesel into jerrycans, arguing that it posed safety risks and also contributed to black-market sales.
BOL also struck a similar note, saying in a statement: “ e prevalent use of jerry cans is also a concern, as it promotes the hoarding of fuel and unsafe storage practices.”
Rationing regime
Since Botswana has limited in uence over South Africa, it is now working to address the prob- lems within its own fuel markets.
On July 9, President Mokgweetsi Masisi unveiled a new policy initiative designed to mitigate shortages and discourage stockpiling. He said his government was working to stabilise the supply/demand balance by rationing petro- leum product supplies and might also review the operating hours of lling stations for the same purpose.
Under the rationing regime, he said, drivers will only be permitted to buy BWP250 ($21.55) worth of gasoline or diesel at a time. ey may only purchase motor fuel in jerrycans on urs- days and will not able to pump motor fuel into drums or large containers at all, he stated.
Public transport and emergency vehicles will not be subject to these restrictions, he added.
Masisi also stated that the government was urging the public to support the new policy. Private automobile owners can help by giving essential workers priority at lling stations and conserving fuel by carpooling, using public transport, cycling or walking, he said. He also advised drivers to avoid speeding, as fast driving consumes more fuel, and said Gaborone might lower speed limits on a temporary basis.
In the meantime, he said, the government is looking into other options for boosting fuel supplies. It is considering proposals to with- draw more fuel from its strategic reserves, which currently hold enough to cover domestic consumption for 12 days. Additionally, he said, BOL is working to purchase additional fuel from Namibia and Mozambique, and negotiations with suppliers in those countries have reached an advanced stage, he said.
Waiting for relief
Despite these e orts, the country’s fuel market is not likely to return to normal soon.
For one thing, it remains to be seen how much additional fuel BOL will be able to obtain from Mozambique and Namibia. Even if the company can buy enough to make up for the disruption in South African imports, it will have to spend more money to secure supplies. As Tshekedi pointed last month, the shi to new suppliers in Namibia and Mozambique is sure to raise the cost of transporting fuel into Botswana. BOL has therefore asked Gaborone to allocate BWP5-6mn ($430,000-510,000) to subsidise the costs of transportation, he said.
For another, Botswana’s ability to cover sup- ply gaps while it is waiting to nalise new deals is limited. e country’s strategic stocks are not unlimited, and BOL noted in its statement last week that the government had already released some 30.8mn litres of petroleum products from these reserves. And according to President Masisi, e orts to keep them replenished have run into challenges.
“Locally, one of our challenges has been that during the lockdown, fuel stock levels of oil companies were very low because there was very little activity due to the movement restrictions, and as such, they did not replenish their stocks on time,” he was quoted as saying by Botswana Daily News on July 9. ™
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in Gaborone say
hoarding and panic buying have made shortages of fuel even more acute
Many officials
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