- Citizen companies now handle 30% from 9% before
- Critics say reserves have dropped from 10 to two days
TLOTLO KEBINAKGABO
Implementation of Botswana’s 90/10 petroleum import mandate has drawn both praise and criticism as it reshapes the country’s energy sector.
Under the policy, Botswana Oil Limited (BOL), the state-owned entity tasked with securing the country’s fuel supply, has taken control of 90 percent of petroleum imports, leaving only 10 percent to private importers.
The mandate – which is aimed at increasing citizen participation in the oil and gas industry but was adopted without industry-wide consultations – has left some international oil companies (IOCs) struggling to adjust, raising concerns over supply chain stability and competitive market conditions.
Infrastructure development
However, the General Manager of Supply at BOL, Onkutule Masima, defended the initiative at a recent press conference in Gaborone where he emphasised BOL’s role in fostering local business growth.
“Non-enforcement of the 90/10 policy would have stifled citizen participation in the industry,” he said. “Citizen-owned companies were importing just 9 percent before the mandate, but they are now handling around 30 percent and growing.”
He disclosed that over 20 citizen-owned companies are actively importing fuel, collectively employing more than 1,300 people. Revenue generated by BOL, he added, contributes to national infrastructure development, with the entity set to declare its first dividend to the government in October 2024.
Uncompetitive
Masima painted a picture of economic transformation, arguing that the import mandate has the potential to diversify Botswana’s economy, strengthen the oil and gas value chain, and spur job creation.
However, not everyone in the industry shares this optimism. An individual in the petroleum field who requested anonymity described the policy’s implementation as disruptive and damaging to the country’s petroleum supply network.
“The issuance of the 90 percent import mandate has resulted in an uncompetitive business environment,” the industry insider said.
At risk
“It was introduced without consultations and lacks a proper structure to handle the consequences, particularly for IOCs whose business models have been severely impacted.”
Critics argue that BOL, despite its dominant role in the market, has struggled to maintain supply stability. As at January 2025, BOL was reportedly able to supply only 50 percent of IOCs’ required product nominations.
“Botswana Oil has demonstrated that it is not a reliable supplier,” the insider insisted. “Any inefficiencies – whether through supply shortages, delays or uncompetitive pricing – directly put IOC business models at risk.”
Industry players have also raised alarm about dwindling fuel reserves. Before BOL took over as the primary importer, stock cover ranged between eight and 10 days. It has now dropped to as low as two days.
Strategic reserves
The situation has become so dire that BOL has had to dip into government strategic reserves to maintain supply, with IOC storage facilities either empty or critically low.
“It will take some time before average stock days recover from the current one to two days back to the required eight to ten days,” the insider warned. “Whenever there are hiccups at BOL sources or along the supply routes, the market is left vulnerable to shortages.”
But despite these concerns, BOL remains committed to the policy’s long-term vision, arguing that the transition period will come with challenges but will ultimately lead to a more inclusive petroleum sector.