28 Feb 2021

Parliament has learnt that the Liquefied Petroleum Gas (LPG) industry in Botswana has been unregulated over the years.

Minister of Mineral Resources, Green Technology and Energy Security, Mr Lefoko Moagi,  however, said Parliament passed the Botswana Energy Regulatory Authority Act in 2016 to regulate the provision of energy services including LPG.

To fully establish how the LPG industry has been functioning, Minister Moagi said the ministry, through the Botswana Energy Regulatory Authority (BERA) had commissioned a Gas Market Study, which would be completed by next month.

He said the study would, among others, look into market structure in terms of the value chain, market participants including company shareholding as well as pricing.

In addition, he said that the study would look at investments into the sector, including ownership of assets, citizen participation as well as safety and health issues pertinent to the sector.

Therefore, Mr Moagi said that the question raised in Parliament was based on preliminary information as collected by BERA for purposes of the study.

He said the information was still to be verified through a consultative process with the LPG industry towards finalisation of the market study report.

Further, Mr Moagi stated that volumes of LPG imported into the country from 2010 to 2019 indicated that information on disaggregated volumes according to domestic, commercial and industrial uses was currently not available and that the information would be sourced in future as more work was undertaken to assess performance of the sector.

He said the local gas market currently had six importers and 10 known distributors and that the retail space comprised of numerous small businesses that sold gas. The retailers, according to Minister Moagi, ranged from those with cages of varying sizes to a small man in the street known as ‘bakkie boys’.

He also stated that the retail space was reserved for Batswana and that the six importer companies were Afrox, Easigas, Tswana Gas, Air Liquide, Quick Gases and Simsa Gas.

He said information on the shareholding had been sourced from the Companies and Intellectual Property Authority (CIPA) website and it showed that only Tswana Gas had majority citizen shareholding at 57.4 per cent while others were foreign owned. Despite the temporary closure of Quick Gases, he said the local gas market continued to operate efficiently, serviced by the other five importers.

“We did experience some disruptions last year due to challenges in South Africa at the refineries, but it was for a short time. Therefore, there are generally no significant challenges regarding the supply of LPG into the country,” he stated.

Mr Moagi said all volumes imported into the country were filled into cylinders of varying sizes (nine, 14, 19 and 48kg) and distributed accordingly.

He also said that information on shareholding of distributing companies was also sourced from the CIPA website and there were few market players.  Therefore, he said that there was no monopoly in the LPG industry.

Further, he stated that BERA, as the licensing authority in the energy sector, continued to ensure that Batswana were facilitated by way of granting licenses to operate businesses in the energy sector, including LPG.

He said the licensing committee of BERA sat every Friday to consider license applications brought before the authority and that Botswana Oil Limited had been established as a government strategic entity to, among other objectives, ensure meaningful citizen participation in the petroleum sector, including LPG.

Therefore, he said the ministry through its strategic entities would ensure that Batswana companies were capacitated through awareness sessions on issues pertaining to running sustainable operations in the energy sector, including LPG.

Mr Moagi was responding to questions from Shoshong MP, Mr Aubrey Lesaso, who had asked the minister to state the total volume of LPG imported into the country every year and to categorise the volumes into domestic, commercial and industrial uses.

He also wanted to know the number of gas importers in Botswana, and how many were Batswana Companies and how many were gas distributors or retail. ENDS