BOL, international oil companies lock horns over supply

Mbongeni Mguni | Monday October 19, 2026 06:00

IOCs operating in the country, who comprise some of the world’s biggest players, have pushed against the BOL’s 90% mandate since it was introduced in 2024, noting that the move not only exposes the country to greater risk in supply, but also ties the IOCs hands in terms of controlling their businesses.

Under the import mandate, 90% of the country’s oil imports are reserved for the BOL, which then on-sales these to the IOCs. The balance is imported by certified citizen companies. The changes were designed to enhance citizen empowerment in the oil industry, enabling downstream linkages in the logistics sector.

Earlier in the week, the IOCs released a joint statement alleging recurring supply shortfalls from BOL, which they said were creating significant operational challenges, “particularly when demand exceeds the volumes made available by BOL”.

The oil companies said figures from the industry shows that BOL fulfilled an estimated 70% of the product demand nominated by IOCs for September 2026, leaving an estimated 30% shortfall against the total volumes requested by the companies.

“The supply constraints have also been reflected in declining petrol imports,” an association representing the IOCs said in a statement. “Petrol imports in September 2026 fell by an average of 27% compared with the year-to-date monthly average recorded between January and August 2026, pointing to a significant reduction in the volumes entering the market.”

The oil companies said the supply challenges had also accumulated over time, with BOL recording a cumulative supply shortfall of 20% against IOCs demand in the first year of the 90% import mandate.

“The impact is not limited to product availability. “The shortages are also creating additional logistical and financial pressures for oil companies. “The unavailability of petroleum products in southern Botswana has forced companies to transport fuel from northern supply points to southern destinations, resulting in transportation costs increasing by up to four times per load compared with normal distribution arrangements, where products would ordinarily be sourced from Gaborone.”

Sesupo Wagamang, chairman of the International Oil Companies association, told Mmegi that initially, the Southern region experienced shortages more significantly because it accounts for a larger proportion of the country's fuel demand and consumption.

He said consequently, any disruption or shortfall in supply was likely to be felt more immediately and severely in the South compared to the North.

“However, the supply challenges have since extended to the Northern parts of the country, indicating that the shortage is no longer isolated to a particular region but has become a nationwide concern,” he said in a written response to emailed enquiries.

Wagamang said the disruptions had caused financial losses to oil companies.

“Since the onset of these disruptions, the industry is estimated to have incurred financial losses running into millions of pula, primarily attributable to persistent ULP 95 supply shortages and inefficiencies within the existing fuel supply chain model. “A significant proportion of these losses has been borne by IOCs whose operations have been adversely affected by inconsistent product availability. “The financial impact extends beyond IOCs to fuel retailers, who experience reduced sales volumes, revenue losses and increased operational uncertainty when IOCs are unable to meet their supply requirements. “These disruptions create a ripple effect across the petroleum value chain, potentially threatening business sustainability, employment security, and ultimately contributing to increased unemployment.”

For its part, BOL has rejected the IOCs allegations, with spokesperson, Thabang Fanyana, saying while broader global and regional fuel supply challenges had intensified in September, particularly around ULP 95, BOL had put in place mitigations to ensure product availability.

While IOCs estimated that BOL fulfilled about 70% of the product demand in September 2026, Fanyana said the figure was actually higher than that.

“From January to August 2026, BOL availed petroleum products in line with industry nominations. “In September, uplifts reached 88% for ULP95 and 95% for Diesel 50ppm. “Global availability of Unleaded Petrol 95 is currently facing tightening supplies and high market volatility primarily driven by ongoing geopolitical conflicts in the Middle East and energy sector strains. “The company's immediate priority is to monitor product availability, coordinate supply and distribution arrangements and pursue alternative sourcing opportunities to improve security of supply,” he told Mmegi in a written response.

He added that these interventions are complemented by ongoing efforts to diversify Botswana's petroleum supply corridors, including the recent successful receipt of petroleum cargo through Mozambique, which “represents a significant milestone in expanding the country's supply options and reducing dependence on traditional import routes and intermediary traders”.

The clash between IOCs and the BOL comes as the Ministry of Minerals and Energy undertakes a review of the 90% import mandate, a process kicked off earlier this year.

Wagamang told Mmegi the association had contributed its views to the review.

“The IOC Association members were consulted and provided with the draft Amendment Bill for review. “We have since submitted our comments and recommendations to the regulator, emphasising the need for a balanced and competitive import framework that promotes security of supply, operational efficiency and industry sustainability,” he said.

He said while IOCs supported government’s citizen empowerment efforts, the companies believe that these objectives can be preserved “while introducing greater flexibility into the current procurement framework to safeguard national fuel security and ensure consistent product availability”.

The BOL says the establishment of the 90% import quota was based on the strategic importance of energy security to Botswana's economic development and national interests.

Fanyana said the framework is intended to strengthen the country's capacity to manage, coordinate petroleum imports, diversify supply sources, develop strategic reserves and reduce exposure to external supply disruptions.