Despite achieving the notable milestone of paying a first-time dividend of P10 million to the government, Botswana Oil Limited (BOL) faced significant setbacks in its yearly profits due to supply disruptions and continued investments for implementing the 90 percent fuel import quota mandate.
During the 2022/23 financial year, BOL recorded P2.6 billion in revenue from 187 million litres of fuel, which translated into a profit of P99 million.
However, the following year saw a decline in profits, dropping to P69 million despite higher revenues of P3.083 billion for the 2023/24 financial year.
Speaking at the launch of the 90 percent import quota mandate, Minister of Minerals and Energy Lefoko Moagi expressed optimism about the future transformation of Botswana’s petroleum industry.
He noted that Botswana Oil’s financial performance had significantly improved, with the company evolving from a history of losses to delivering healthy business results, even in challenging times.
“Through the Department of Energy, assets such as the storage facilities at the Gaborone and Francistown depots have been transferred to BOL. This not only strengthens the company’s balance sheet but also enables it to execute the fuel security strategy for the country,” Moagi explained. He emphasized that BOL’s current profitability would be reinvested in infrastructure development, reducing the company’s dependence on government funding.
The implementation of the 90 percent import quota is expected to boost BOL’s revenues to approximately P15 billion, with future profits projected to be between P400 million and P500 million.
Established 11 years ago, Botswana Oil Limited initially operated under a Willing-Buyer-Willing-Seller model, which left the government unable to guarantee the security of fuel supply.
To address this issue, the government increased BOL’s import volumes by consolidating them through an importation quota, ensuring that 90 percent of petroleum products were imported by the national oil company.
As of April 1, 2024, International Oil Marketing companies now purchase petroleum products from Botswana Oil instead of importing directly.
Moagi acknowledged the contributions of these international companies, noting that they had invested in skills development and capacity building of local employees.
He assured that these companies would remain key stakeholders, distributing petroleum products through their retail networks to serve both commercial and consumer sectors.
The remaining 10 percent of fuel imports is reserved for citizen-owned companies that already possess operating licenses.
These businesses are permitted to import petroleum products for their own consumption and distribution.
However, the transition to the new quota model has not been without its challenges.
BOL’s Chief Executive Officer, Meshack Tshekedi, highlighted that a shortage of Unleaded Petrol (ULP 93) disrupted the industry following the annual maintenance shutdown of the NATREF Refinery.
This led to consumers switching to ULP 95, creating pressure on supply and resulting in some panic buying that left certain petrol stations dry for a few days.
“Often in business, a major shift in operations demands significant agility and resilience,” Tshekedi remarked.
“While we are navigating the evolution of our business, we’ve encountered resistance, risks, and operational challenges, but our focus remains on securing fuel supply for the country,”
