- Botswana Oil rejects blended 93
- Sasol invites BERA to explore its products
Botswana has traditionally relied on two grades of petrol—unleaded petrol 93 (ULP93) and unleaded petrol 95 (ULP95).
However, recent trends indicate a decline in the supply of ULP93. Botswana Energy Regulatory Authority (BERA) figures show that suppliers delivered only 28 million liters of ULP93 instead of the committed 36 million liters, resulting in a fulfillment rate of 76%. By July, supply had further dipped to around 45%, though it improved after the Natref refinery resumed operations following maintenance.
In response to the limited supply of 93 petrol, Botswana Oil has been increasing its focus on 95 to compensate for the shortfall. BERA’s COO, Batsumi Rankokwane, said the decline in ULP93 had been evident even before April when Botswana Oil was granted majority control over its supply.
Rankokwane explained that when Oil Marketing Companies (OMCs) recognise a shortage of ULP93 in the market, they often purchase ULP95 and downgrade it, effectively selling it at the price of ULP93. He described this as a common business practice globally, although it incurs costs, as OMCs buy the more expensive fuel and sell it at a lower price.
“With the OMCs, or even other companies, you may achieve higher margins in one area, which can subsidise another area where performance is lacking,” he said.
Rankokwane suspects that Botswana Oil may not be immune to this practice. In August, the organisation reportedly rejected blended ULP93 to distance itself from this grade of petrol. Botswana Oil’s earlier position lent credence to claims that the country is moving toward completely removing ULP93 from the market.
Last week, BERA announced that this decision will take effect on February 1, 2025, aligning with regional counterparts such as Namibia, Mozambique, and Eswatini, which have already discontinued the use of ULP93.
Over the years, South Africa, Botswana’s primary supplier, has experienced a significant decline in refining capacity, with several major refineries shutting down. This decline is attributed to aging facilities and the substantial investment needed to repair or upgrade them for cleaner fuel production. ULP93 is produced in limited quantities exclusively at the NATREF refinery in South Africa, which is the main source of ULP93 imported into Botswana and other regional countries. While sporadic imports from other parts of the world may occur, challenges arise from South African Revenue Service (SARS) regulations concerning re-exporting these products.
Through active engagement with local and regional stakeholders, BERA has been made aware of South Africa’s plan to discontinue ULP93 supply around 2026.
They have also received an invitation from Sasol to explore which products they can source from the company.
Effective February 1, 2025, Rankokwane announced that BERA will deploy quality inspectors to test fuel throughout the country, focusing particularly on petrol. “If testing shows the presence of ULP93, then appropriate measures will be taken, as this would indicate non-compliance,” he stated.
He mentioned that BERA operates a petroleum testing laboratory in Lobatse and also has a mobile unit that can travel to various locations for testing. Rankokwane believes it is easier to monitor the market because Botswana Oil is the majority importer of petroleum products. “It’s a government company. We primarily deal with them and the smaller citizen-owned companies that import.”
Most citizen-owned companies focus on importing diesel. Rankokwane stated that BERA will analyse import volumes monthly.
“We have a standing agreement with the Botswana Unified Revenue Service. Each month, they provide us with details of every company that has brought fuel across our borders.”
As a regulator, Rankokwane emphasised that they will closely monitor the market regarding the supply of petroleum products. This oversight aims to ensure that they can properly advise the government in the event of any supply changes or necessary modifications.
