High fuel prices to push inflation
Increased pump prices for petrol, diesel and illuminating paraffin are expected to push up inflation in the remaining months of the year. This week government announced an increase in retail pump price for petroleum due to volatility of crude oil prices prevailing on the international market. Though annual inflation recorded a 0.1 of a percentage drop in September to 2.9 percent from 3.0 percent in August, according to the Statistics Botswana report, industry predictions have already anticipated an increase. Last adjusted in May, the hike for retail pump prices for petrol, diesel and illuminating paraffin was also attributed to the growing under recoveries since September 2017. “This is to say, the cost of bringing petroleum products to Botswana has been higher than the regulated price, hence the need to align local pump prices to international prices,” said a statement from the Ministry of Mineral Resources, Green Technology and Energy Security. Government further said the volatility of crude oil price is influenced by amongst others changes in supply and demand on the global market, production and refining capacities and geopolitics. Last month, Chimweta Monga, Managing Director at Engen Botswana had said he believes the increasing international fuel prices and the need to offset the growing slate under-recovery will put pressure to adjust the fuel prices upwards resulting in increased inflation during the remainder of the year. Statistics indicate that the slate receivable from government increased P226 million to 305 million from December 2017 to June 2018. The adjustments are 65 thebe per litre for petrol, 73 thebe per litre for diesel, 63 thebe per litre for illuminating paraffin.