Expert Explains Why Botswana’s February Fuel Prices Still Out of Reach

A return to Botswana's February 2026 fuel prices would require a combination of lower international refined fuel costs, a stronger Pula and the resolution of outstanding costs accumulated during the March global energy shock, according to energy analyst Stephen Lecha .

Lecha said the July fuel price reduction provided only partial relief because the factors that drove prices sharply higher in March have not fully reversed.

"No single factor can reset the price floor on its own," he said, explaining that international markets, exchange rates and domestic pricing mechanisms would all need to move in the same direction before motorists see a full return to pre-shock levels.

One of the biggest requirements would be a sustained decline in international refined petroleum product prices.

Although Brent crude has fallen back to around US$72–73 per barrel , Lecha said Botswana's pump prices are influenced more directly by refined fuel costs at regional ports than by crude oil benchmarks alone.

For petrol prices to return to February levels, international petrol prices would need to fall back towards approximately US$80 per barrel , while diesel prices would need to decline towards around US$91 per barrel , he said.

Such a correction would require global refining capacity to fully normalise and remove the product premiums that emerged during the supply shock.

However, even a significant fall in international prices would not immediately translate into lower pump prices.

Lecha said prices would need to remain favourable for at least two to three consecutive 45-day pricing cycles to allow BERA's pricing mechanism to recover accumulated under-recoveries, settle outstanding supplier costs and rebuild the National Petroleum Fund (NPF) buffer.

"For as long as BERA is holding back a portion of global price drops to pay off past supplier debt, local prices cannot hit pre-war floors," he said.

The exchange rate presents another major obstacle.

Lecha said the Pula would need to strengthen significantly against the US Dollar, returning below the P13.50 per Dollar level recorded earlier in the year, for consumers to benefit fully from lower international prices.

"International refined fuel is priced in US Dollars but purchased locally in Botswana Pula. Even if international benchmarks remain unchanged, any depreciation of the Pula against the Dollar directly increases the local landing cost," he said.

Botswana's exchange rate policy, which allows for an annual 2.76 percent downward crawl of the Pula, means the currency is structurally designed to weaken gradually against major trading currencies, creating additional pressure on imported goods.

Because refined petroleum products are purchased in US Dollars, importers now require more Pula to buy the same volume of fuel, raising the landed cost despite weaker global benchmarks.

Lecha believes Botswana's exchange-rate policy has also contributed to the slower decline in domestic fuel prices.

While the policy benefits exporters, it also gradually raises the cost of imported goods, including fuel.

"When global oil prices rise, the weaker currency amplifies the increase. When they fall, it limits how much of the savings reach consumers," he said.

However, o ne factor that has helped contain further increases is the relative stability of the Pula against the South African Rand. Most of Botswana's fuel is transported through South African infrastructure, making the BWP/ZAR exchange rate a key determinant of inland logistics costs. Although the Pula weakened against the US Dollar, it remained relatively stable against the Rand, preventing further increases in pipeline charges, road freight and other regional transport costs.

Domestic tax decisions will also influence the final price consumers pay.

Following the March shock, President Duma Boko's administration suspended several fuel-related levies for six months as an emergency measure to cushion consumers from rising costs.

However, the reinstatement of the Fuel Levy, Road Fund Levy and Security of Supply Margin could offset some of the benefits from falling international prices.

The outlook also depends on government decisions around temporary fuel relief measures.

The suspension of fuel and security levies introduced earlier this year is expected to end in October. E conomic researcher Douglas Rasbash warned that reinstating the levies could push domestic fuel prices higher even if international oil prices remain subdued.

“This remains an important risk. The temporary suspension of the fuel and security levies has cushioned consumers from even higher fuel prices during recent months. If those levies are reinstated in October, they would increase domestic fuel prices irrespective of movements in international oil markets,” he said.

The World Bank highlighted these policy trade-offs in its latest Botswana Economic Update , warning that while temporary fuel levy suspensions provided short-term relief to consumers, they also transferred part of the cost burden to government finances.

The report noted that prolonged reliance on such measures could weaken fiscal discipline and increase pressure on public finances if global oil prices remain volatile.

Going forward, the World Bank said maintaining automatic pricing mechanisms would be important to protect fiscal stability, even when such adjustments create short-term political pressure.