Petroleum Fund sitting at P600million

The National Petroleum Fund (NPF) is currently hovering at around P600million, Botswana Guardian has learnt. The NPF is used by government to pay petroleum retailers the difference between the administered and prevailing fuel prices. The Fund collects 13,5thebe per litre every time motorists fill up at pump stations.

Responding to an inquiry at a media brief this Tuesday, Principal Energy Officer in the Department of Energy, Merapelo Tautona said the fund is audited every year. “We have approximately P600million. Last year we used about P100million. With this amount we believe it is enough to sustain us into the next couple of months. We have never really run out and we see its balance indicating that the regulation can take us to the next months,” he says. Principal Energy Engineer, Baruti Regoeng concurred, adding that the cumulative state is also balanced. The only challenge he said is the Tshele Hill project, a large storage facility which consumes more of the funds. “However, we try to make sure that the project expenditure doesn’t overshadow the funds objectives,” he said.

Meanwhile, Regoeng hinted that reviewing of the current price structure is under consideration. Currently the pricing structure is based on South Africa’s Durban route where the Durban facilities serve as storage facilities. The costs structure covers the transportation fees from Durban to Gaborone, laboratory, letters of credit, surveyors, and 25 days of stockholding amongst other components. Regoeng indicated that, “the review of the pricing will take into consideration other alternative routes, such as the Maputo in Mozambique.” Consumers have always wondered why fuel prices cannot be subsidised as in other countries. In addition, prices take long to be adjusted in Botswana immediately they are reduced numerously in other countries like South Africa when fuel prices plunge.

Botswana is a net importer of oil which constitutes over 60 percent of the total imports. Surely the falling prices are a plus for the country as it reduces the import bill thereby improving the country’s current account. In Botswana’s case, petroleum prices are not subsidised but rather the Fund is used to cushion the prices. In this case, Tautona explains that in South Africa prices are administered through an autonomous body unlike in Botswana where there are a lot of approval processes. This takes a longer time than would happen in SA. Also, because the Fund helps cushion such situations, the price adjustment is likely to delay when the cumulative is healthy.