The National Petroleum Fund debt has reached an unsustainable state and this result in difficulties for Oil companies to secure supplies from the international market.

Addressing the media on Wednesday, Puma Energy Head of Africa Fadi Mitri said that with the rising prices the NPF Slate deficit has grown to an unsustainable level.

“This outstanding balance puts pressure on oil marketing companies and squeezes the availability of working capital and their financial position making it more and more difficult to secure supplies from the international market.”

Although he could not reveal the amount they are owed, Mitri said they are keen to work with the various government officials and with the Department of Energy, Ministry of Mineral Resources, Green Technology, and Energy Security.

He said they are in dialogue with the government to address these vulnerabilities. “By working together, we can hopefully find a mechanism that will help reduce and ensure the security of supply.”

He pointed out that Botswana's energy supplies are exposed to three challenges - international energy crisis, regional changes in supply patterns (decreasing refinery capacity in South Africa), and domestic (National Petroleum Fund Slate deficit). He said the rise in fuel prices is disproportionally impacting energy-importing African countries which could potentially impact inflation, create current account imbalances and limit foreign exchange availability.

“Many governments are having to re-evaluate their pricing mechanisms to alleviate pressure and prevent growing subsidies or debt.

“It is important that governments take proactive measures in managing subsidies as it will be critical in managing their fiscal risk, especially as the situation becomes more challenging as prices are expected to rise in the weeks and months ahead.”

To keep up with the increasing fuel prices Botswana Energy Regulatory Authority (BERA) has been increasing fuel prices frequently this year with the latest increase being in May.

Meanwhile last year BERA Chief Executive Officer, Rose Seretse told members of the Parliamentary Committee on Statutory Bodies and State Enterprises that the Fund (NPF) was still unable to perform what it was created to do.

She said according to the information they got from the Department of Energy, the NPF balance stood at P451 million as of September 22, 2021, against the P525 million being claimed by oil companies.

“The claims for oil companies as of August stood at P525 million. You can see that the balance is lower than what the companies are claiming.”