The new contracts will not be sought through open tender, but rather through suppliers already on BOL’s database and who have undergone due diligence, the organisation’s general manager for supply, Onkutule Masima, told a recent webinar.
“We have contracts running currently and these are until the end of September,” he said. “We have a process where we have registered or done due diligence on suppliers and everyone has to go through that channel. “For fuel supply, we don’t go to an open tender but rather, we send to suppliers that we have already done the due diligence and are happy with.”
The upcoming contracts are being eagerly monitored by the local and international oil industry as they represent a piece of a 108 million litre per month pie which is backed by a government that enjoys one of Africa’s highest sovereign credit ratings.
BOL executives previously told BusinessWeek the longer contracts would likely be for a minimum of 12 months in length.
At present, ten firms in South Africa, Namibia and Mozambique are providing supplies to BOL, ahead of the award of the longer-term contracts. The firms’ supply is split with South Africa providing about 60% of supply and the balance shared equally between Namibia and Mozambique.
“We are moving product out of Matola, through Zimbabwe and into Francistown as well as Walvis Bay, but the bulk is still from South Africa,” said BOL senior manager for commercial, Thabo Simon. “Based on many issues and factors, sometimes we will move more out of Mozambique or Namibia, to balance out our stock. “We will continue to do that to make sure we manage issues of security of supply for the country.”
Since April 1, BOL has been importing 90% of the country’s fuel imports and on-selling this to the existing multinational oil companies that are operating in the country and have previously imported for themselves. Citizen companies have the right to import the outstanding 10%.
BOL secured the 90% import quota last October through a Statutory Instrument. Government and the regulator, the Botswana Energy Regulatory Authority, say the import quota ensures security and stability of supply, provides leverage to negotiate better prices and terms and also empowers citizen entrepreneurs in an industry dominated by large, foreign multinationals.
