BOPRA flags fuel-price undercutting as fair competition threat
Spira Tlhankane | Tuesday June 30, 2026 13:30
In a recent media brief, the association representative, Billy Sekgororoane, stated that, to the extent such practices occur, they may further disadvantage compliant retailers and accelerate the transfer of volumes away from smaller operators.
“The association’s concern is not only the impact on individual retailers, but also the implications for the long-term sustainability of a diverse and competitive retail fuel sector. The issue highlights the importance of consistent enforcement of regulated fuel prices and the need for a dealer margin methodology that takes account of the realities of the current market structure,” he revealed.
Sekgororoane said the association has consistently maintained that dealer margins should be determined using a transparent, cost-reflective methodology. He indicated that in recent months, the association has repeatedly sought to engage with BERA on dealer margins and the need for a transparent framework governing their determination and adjustment.
He claimed that despite repeated requests for meetings and engagement, the association has not secured meaningful progress on the issues raised.
The association therefore resolved to pursue the matter through formal legal channels to secure both an urgent review of the current dealer margin and the development and implementation of a transparent dealer margin methodology, he said.
He added that the association’s position is that these two issues are inseparable. Whilst an interim increase is needed to address immediate concerns about retailer sustainability, a transparent methodology is required to provide a long-term, objective basis for future reviews.
He said the association should continue to engage with government and other relevant stakeholders to ensure that the issue receives appropriate policy and regulatory attention.
“The association further notes that differences influence the competitive dynamics within the sector in scale and business structure. Operators with interests across multiple sites may benefit from economies of scale that are not available to smaller independent retailers,' Sekgororoane further noted. 'Similarly, vertically integrated operators may derive revenue from multiple levels of the value chain, including both wholesale and retail activities. These advantages may enable certain operators to pursue volume-driven strategies that are not readily available to single-site independent retailers operating solely on the regulated dealer margin.'
He also added that the association further notes the continued growth in the number of licensed retail fuel sites across the country, including instances where sites operate in proximity to one another. He said whilst increased participation in the sector is welcome, the proliferation of retail sites has implications for the economics of fuel retailing. In a regulated, low-margin environment, the sustainability of a retail site depends significantly on fuel throughput.
Sekgororoane pointed out that as the number of sites increases, average volumes sold per site may decline, resulting in fixed operating costs being spread across fewer litres sold.
“This dynamic may increase the cost per litre of operating a retail fuel site and place additional pressure on the viability of smaller operators. It may also partly explain the emergence of operators managing multiple sites across different brands as a means of achieving economies of scale and spreading overhead costs across larger aggregate volumes. The issue further highlights the importance of a transparent dealer margin methodology. Any assessment of the adequacy of dealer margins should consider not only inflation,” he said.