Botswana Oil positive on getting import license
Botswana Oil Limited is buoyant that the regulator, Botswana Energy Regulatory Authority (BERA) will have a positive second thought on its exclusive petroleum import license which it rejected nearly a year ago, Botswana Guardian understands.
Mid last year, BERA which is headed by Rose Seretse gave the company’s application for exclusive import of all petroleum and petroleum products thumbs down, arguing among others that Botswana Oil does not have financial and operational capacity to handle the pressure that comes with the license. Nonetheless, the company did not take the regulator to court but rather decided to engage with the parent ministry on a way forward.
When responding to this publication acting Chief Executive Officer of Botswana Oil, Meshack Tshekedi said they are upbeat a solution will be found, once and for all as far as the license is concerned.
“Ever since the license rejection we have been engaging BERA to look for a common ground and understanding and ways they can facilitate the license,” said Tshekedi. He was speaking on Wednesday from Doha, Qatar where he is part of a delegation of Botswana Investment and Trade Centre’s trade and promotion mission in the oil rich country.
Like the previous Chief Executive, Willie Mokgatlhe, Tshekedi is of the opinion the license should be granted to enable the state-oil company to transform the multi-billion Pula sector and create opportunities for citizen companies. Botswana Oil was established to support the government in achieving two broad national economic objectives of ensuring the security and efficiency of fuel supply to as well as promoting active citizen involvement in the petroleum industry.
Tshekedi, who is tipped to succeed Mokgatlhe in the company’s hot seat disclosed the Ministry of Mineral Resources, Green Technology and Energy Security is supporting them in their quest to get a license, which will effectively bar multinational oil companies from buying their supply from outside.
They will instead buy from Botswana Oil. However, BERA appears to doubt Botswana Oil’s readiness. “Botswana Oil has not submitted a business case in support of the proposed changes in the current arrangements for importation of petroleum and petroleum products in the country, therefore making it difficult to assess the costs and benefits of the proposal,” said the authority in its 8th May 2018 decision that rejected their application. Accordingly, it is this failure by Botswana Oil to state their financial readiness to be the sole importer, that the application is based on speculation, said BERA.
By law, any application for this license, Botswana Oil included, is supposed to provide evidence of their financial capability, but such information was not provided when the application was lodged. Back then, Mokgatlhe told Botswana Guardian that Botswana Oil is financially-ready to become the only importer of petroleum products in Botswana. He said, for every litre of petroleum products purchased by consumers, Botswana Oil is entitled to 17, 5 thebe. This allows the Gaborone-based company to go into the open market to raise cash if the need arises.
The former Chief Executive also revealed that the company, which has been registered privately, has also agreed with Omani Trading International to supply it with petroleum products on credit basis. “This is a done deal (referring to the Omani),” he said confidently. Omani Trading specialises in selling, marketing and supplying crude oil. Botswana Oil, which was established in 2013, resubmitted its application for the license last month.
Botswana’s petroleum industry which is worth billions of Pula and dominated by multi-nationals such as Pula Energy, Engen, Total among others. In the long term, Botswana Oil is expected to roll new fuel filling stations especially in underserviced markets.