No fuel price hikes anytime soon
Isaac Pinielo | Thursday October 6, 2016 18:00
Briefing journalists on Tuesday, the principal energy officer, Merapelo Tautona said any impact emanating from the rise in international crude oil prices will not be felt locally as it will be cushioned by the National Petroleum Fund (NPF).
The NPF is used by government to pay petroleum retailers the difference between the administered and prevailin0g fuel prices.
He said the purpose of the fund is to stabilise retail pump prices for controlled petroleum products, as well as to purchase petroleum product stocks for the government’s strategic oil storage facilities.
“The fund is also meant to meet insurance premiums in respect of the insurance of government’s strategic oil storage facilities and stocks,” Tautona said.
Currently the fund has about P600 million in its coffers, which according the energy officer is meant to meet the engineering, construction and operational costs of the strategic petroleum product storage facilities for government fuel.
He explained that payment into the fund is done through all receipts from petroleum levies charged under the control of goods regulation.
Tautona said the fund also collects a levy rate of 13.5 thebe per litre from the sale of both petrol and diesel grades on a monthly basis, as well as payments through over recoveries.
“The fund also gets income generated from the investment of the fund’s monies and any other money received from the government,” he said.
He explained that the Basic Fuel Price (BFP) is based on the import parity pricing principle, which is what would cost an importer to buy products from an international refinery, transport the product from that refinery, insure the product against losses at sea and land the product at the borders of Botswana.