Botswana diversifies fuel routes to mitigate

Botswana has taken a significant step towards fuel security by diversifying its fuel supply route sources. The country has reduced its reliance on South Africa, introducing Mozambique and Namibia as additional sources.

Under the new impor t mandate, Botswana Oil Limited ( BOL) is required to import 90percent of Botswana’s fuel needs, reducing South Africa’s supply to just 60percent .

BOL has been cognizant of the concentration risk faced by Botswana due to its heavy reliance on the Republic of South Africa ( RSA) for fuel imports.

This awareness has informed the strategies currently in place and being implemented, as well as future expansion plans. “The company’s supplier base has been actively and intentionally diversified over the past years, with the number of suppliers outside RSA having grown significantly,” said BOL General Manager— Supply, Onkutule Masima when briefing Editors Forum yesterday.

BOL has not only diversified away from RSA as a country but has also ensured a minimum of three or more suppliers are active in Namibia and a similar number in Mozambique at any given time. As a result, BOL has not only diversified its routes but has gone further to expand its supplier base in each of the routes to manage concentration risk and enhance security of supply for Botswana.

Botswana imports 1.3 billion litres of fuel per annum, which works out to be 108 million litres per month. Effective April 1st 2024, BOL must source and supply 90percent of that consumption per month to the market, with the remaining being imported by citizen companies already importing. Citizen Companies who choose to buy from BOL will be accommodated, including those that are importing for themselves.

The 90percent that BOL will import will be derived through the current existing routes ( RSA, Namibia, Mozambique), but primarily supplied through longer- term contracts rather than spot arrangements.