High hopes for another fuel price slash

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Department of Energy Affairs officials will meet next week to review fuel prices amidst expectations of a cut. Oil prices in the international market have slumped by over 50 percent in the past six months, due to over supply from the Middle East producers, raising hopes of retail price cuts.

Neighbouring South Africa have effected a cumulative 30 percent price cut since the slump started, but in Botswana consumers have only enjoyed a six percent reduction effected in December last year.

Speaking to BusinessWeek, Department of Energy Affairs director, Kenneth Kerekang said they would make a decision on any adjustments when they meet next week. “We have only reduced prices in December but currently we are working on our price reviews. By next week we will inform the public on the changes that we are going to make,” he said.

Kerekang said that although the prices had decreased on the international market, the impact had not yet been visible in Botswana unlike in other countries, because price reviews were not conducted regularly. He added that delays in reducing local fuel prices would have been a deliberate policy to rebuild the National Petroleum (NPF), which was reportedly depleted when crude oil prices increased.  Government uses the NPF to pay petroleum retailers the difference between the administered and prevailing fuel prices.


The falling Pula against the US dollar is another factor that could have contributed to the delay in local fuel price adjustments. The benefits of falling crude oil price could have been partially offset by the weakening of the Pula against the Dollar, which has made crude oil purchases more expensive. In 2014, the Pula lost five percent to the greenback.

Editor's Comment
Escalating fuel prices cause panic

Nowadays it is not uncommon to purchase an item for a certain commodity and return to the shops in a week, to find the same item has gone up by a significant amount of money.Botswana Energy Regulatory Authority (BERA) last week announced yet another fuel price increase, which follows yet another increase that came into effect on March 29. Hardly two months later on May 12 boom, BERA announced yet another increase, which came into effect at a...

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