Engen profits drop by P83m after oil import shift
TIMOTHY LEWANIKA | Monday August 18, 2025 06:00
Engen which operates 71 service or “filling stations” across Botswana, experienced sharp pressures on their margins in the full year 2024 with their pretax profits declining from P193.9 million in 2023 to P111.0 million in 2024, an overall decline of 42%.
In the group’s latest annual report, industry insiders said the steep decline was due to policy changes that terminated fuel import licenses giving a 90% import mandate to government-owned Botswana Oil. This has since meant that retailers like Engen are now forced to procure petroleum products such as Unleaded 93 and Diesel from BotsOil exclusively.
The group’s directors shared in the annual statement that Engen had sold 42% less volume of petroleum products than in the previous years with diesel volume sales declining by 42% and petrol volume sales declining by 48%.
“Commercial performance declined over the reporting period. There was a 42% reduction in volume, resulting in a profit of P56 million. Diesel had a 42% decline in volume, and petrol decreased by 48%,” directors noted.
Acting Managing Director Brian Sameke said Engen’s performance had been hit hard by the loss of government contracts—now reserved for 100% citizen-owned suppliers—resulting in weaker sales and tighter margins.
“Other changes to the regulatory landscape have impacted our performance over 2024, particularly a requirement for government departments to purchase fuel products from 100% citizen-owned companies. “Engen was previously supplying some of these government departments and has now lost this business as a consequence,” he said.
In April 2024, Botswana Oil Limited gained the right to import 90% of oil into Botswana, with the remaining 10% reserved for majority citizen-owned companies. This change terminated Engen’s import licence, requiring all multinational companies to purchase oil through Botswana Oil Limited. Consequently, Engen can no longer sell to local independent retailers, who now source directly from foreign distributors.
Sameke further shared that it has lost its ability to resell to local independent retailers due to the oil import shift, resulting in a further loss of business.
“An associated negative consequence of the loss of import licences is that Engen is no longer able to resell to local independent retailers who are now able to find supply directly from foreign distributors outside of Botswana through their 10% import allocation,” he said.
The company executives also complained of product shortages due to Botswana Oil’s teething problems that further affected the stability of supply of petroleum products.
“There have been product supply challenges as Botswana Oil adjusts to its new tasks, particularly caused by logistical issues. “The approach of Botswana Oil importing mainly from a single source led to supply issues that manifested in shortages and rationing of all fuel products, particularly Unleaded 93, which had an impact on Engen,” Sameke shared.
Despite the downturn, Engen closed the year with a P56 million net profit.