Botswana Energy Regulatory Authority (BERA) has rejected a request by Botswana Oil Limited (BOL) to be given exclusive import rights for petroleum.
A statement from BERA says BOL failed to make out a case to demonstrate the necessity of an exclusive license.
The Association’s Chairperson, Bernard Ndove, said that the decision by his authority was based on the failure by the applicant to meet the required stipulated things such as evidence of the financial and technical capability of the applicant.
He mentioned that BOL did not submit business case in support of the proposed changes in the current arrangements for the importation of petroleum and its products therefore making it difficult to assess the costs and benefits of the proposal.
“The failure does not help BOL’s position that they are financially capable of being the sole importer because in the absence of such their application is based on speculation.”
He said that the applicant’s submission is that it is negotiating contracts and agreements at various levels with potential stakeholders. “Submissions made are to the effect that BOL’s capacity is dependent upon them being granted the exclusive licence, however, the requirement is that at the time of application one must have capacity.”
He mentioned that a demonstration of capacity is a prerequisite of the issuance of a licence.
Ndove noted that the applicant does not have sufficient capacity to secure 60 days of uninterrupted supply. “Contrary to the submissions made by the applicant, government ‘s planned bulk petroleum products storage programme clearly indicates that the construction of the Tshele Hills project, expansion of the Francistown Depot and development of the new storage depot will only fulfill the 60 days stock cover by the year 2022.”
He said there is a requirement that the applicant demonstrates the requisite ownership rights or usage rights over facilities at the time of application.
He said that the security of supply is critical and cannot be over looked and BOL failed to demonstrate that there are no other alternatives that could be employed to attain the same objectives without the issuance of an exclusive licence.
The BERA Chairperson said that an exclusive licence grants the grantee hundred percent rights not to be shared by anyone else except by the grantee’s own operations. “Under the exclusive licence there will be nothing that compels IOC’s to continue supplying the remaining 50% which the applicant proposed could be set aside for them for a period of two years while BOL still capacitates itself.”
He said that the fact that the applicant was not ready to assume hundred percent implementation of the license immediately poses a great risk to the security of supply should the license be granted to them in the form and nature that they proposed it.
Ndove noted that it appears that indeed the applicant is on the right track towards citizen empowerment; however, what was lacking in terms of figures is the projected impact and number of opportunities that might arise in the respect so as to impact the country. “A compelling case in projections would have been made out if a figure of citizens likely to be empowered was submitted. For now, it remains difficult for the authority to establish with certainty whether or not the intended empowerment will impact the country, as it stands this one of the necessary factors that if weighed with what currently obtains in the market would have painted a clear picture of the benefits. ”