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Ministry of Minerals, Energy and Water Resources (MMEWR)
Increase in the local retail pump prices for petrol, diesel ...
14/05/12
Increase in the local retail pump prices for petrol, diesel and illuminating paraffin

The Ministry of Minerals, Energy and Water Resources  informs the general public and other consumers that the retail pump prices for petrol, diesel and illuminating paraffin will be increased with effect from Sunday 13th May 2012 at 0001hrs .

 

·        The price of both unleaded and lead replacement petrol grades will increase by 50 thebe per litre.

 

·        Diesel price will increase by 50 thebe per litre while.

 

·        Illuminating paraffin price will increase by 50 thebe per litre.

 

This price adjustment follows the last price adjustment (increase) of 11th November 2011 where petrol, diesel and paraffin were increased by 50 thebe, 51 thebe and 40 thebe respectively.

 

The increase comes as a result of the accumulated price under recoveries experienced by the Oil Industry where the price under recoveries for petrol, diesel and paraffin rose to 94.41 thebe, 91.72 thebe and P2.33 per litre respectively. Prices have not been adjusted over the last four months in spite of the continued increase in the international prices for crude oil and the associated petroleum product. During those four months crude oil prices have been rising, reaching a high of US 125/barrel in March 2012.

 

However, this has put the National Petroleum Fund (NPF) under severe pressure as it has been necessary for the Government to compensate the Oil Industry for some of the losses made during the period.

 

It is worth noting that the current margin of increase for all products is far less than what the prices could have been adjusted or increased to. As at end of April 2012, local petroleum product retail pump prices continued to under recover. The local pump prices for petrol, diesel and paraffin will continue to be below real pump prices by an estimated 44.41 thebe, 41.72 thebe and P1.83 per litre respectively after this increase.

 

The retail pump price for paraffin continues to experience the worst under recovery. This is mainly due to the fact that local paraffin price has on many occasions been cross subsidized by the petrol and diesel prices taking into account its consumption by the less privileged in our society.

 

On the basis of the foregoing; the prevailing price under recoveries will continue to put the NPF under pressure. A comparison of the Botswana product pump prices to the regional prices at Southern African Customs Union level show that Botswana prices continue to be lowest in the region even after this adjustment.

 

The Government will continue to monitor the development of petroleum products prices in both regional and international markets. This will enable Government to take more informed decisions to ensure optimal price control considering all factors to minimise adverse effects on the economy.

 

 

 
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