Botswana Oil declares P10m dividend to gov't
Pauline Dikuelo | Friday October 11, 2024 14:05
The P10 million dividend to government was declared at an event to launch the 90% import mandate and the citizen transporters recently. Buoyed by the declaration and speaking on behalf of the shareholder, Minerals and Energy Minister, Lefoko Moagi, said the ministry was expecting larger dividends from Botswana Oil in future. “As a ministry, and on behalf of the government, we are proud that the company is already generating profits that can be reinvested into infrastructure development, reducing reliance on government funding,” he said. The minister also expressed confidence in Botswana Oil’s future noting that with the implementation of the 90% import mandate in the current financial year, they anticipate that in the near future, the wholly government owned entity will grow its revenues. Moagi anticipates that BOL would grow income to approximately P15 billion with profits ranging between P400 million and P500 million. During the financial year 2022-2023, Botswana Oil reported strong performance with revenue of P2.6 billion, supplying 187 million litres of fuel, and recording a profit of P99 million.
However, in the financial year ending March 2024, Botswana Oil’s profit dipped to P69 million despite an increase in revenue to P3 billion. The reduced profit was attributed to supply disruptions and investments toward the 90% import mandate, an initiative aimed at reducing reliance on imported fuel. Effective this April, BOL has started importing 90% of the petroleum products consumed locally while the remaining 10% has been reserved for citizen owned companies. The citizen owned companies were those who already had operating licences to import petroleum products and their licences allowed them to import for their own consumption and distribution to their own retail networks. Under the scheme, the main change in the petroleum industry is that international oil marketing companies now buy petroleum products from Botswana Oil instead of importing directly for themselves. The 90% import mandate has created opportunities for diversification of sources and routes of supply to reduce concentration risk from dependence on a single major supplier and further widen opportunities for citizen to participate in the petroleum value chain. In 2022, BOL and Debswana entered into a landmark CEEP partnership, enabling four citizen-owned transporters to deliver petroleum products to the Jwaneng, Orapa, Letlhakane and Damtshaa mines.
The five-year partnership, worth P8 billion, was awarded to citizen compaies API, Filano, Skybridge, and Guildhall, who have been trading in the fuel transportation business. The four companies also successfully completed the Sasol Transporters accreditation process, allowing them to uplift petroleum products from Sasol and deliver to Botswana and other countries in the Southern African region. The transporters are part of BOL's expanding network, which started with around 20 citizen-owned trucks operated by seven companies during the 2021/22 financial year. During the current financial year 2024-25, BOL has spent nearly P100 million and is projected to spend P300 million by the end of the year, in support of 16 citizen-owned transporters operating a fleet of 115 trucks. The company plans to increase the number of trucks owned by citizens to over 200 in the next 12 to 24 months by engaging more citizen transporters on long-term contracts to enhance their capacity. Moagi said the increase in the fleet will have a multiplier effect, creating employment for drivers, maintenance services, truck staging facilities, and other activities related to the transportation of petroleum products.