Tokelo Khausela
THE Minister of Energy, Professor Nqosa Mahao, says the government is in the process of developing a fund which will cushion petroleum consumers when prices shoot up drastically.
Professor Mahao said this yesterday at the Interstate Oil Committee meeting hosted by his ministry and the Petroleum Fund in Maseru yesterday.
The Interstate Oil Committee comprises member states of the Southern African Customs Union (SACU) – Lesotho, South Africa, Botswana, Namibia and Eswatini. They meet bi-annually to discuss issues related to the petroleum industry within SACU.
The latest discussions centred around issues of petroleum storage, supply and distribution in the Customs Union area.
Addressing the delegates, Professor Mahao, said the meeting was meant to provide feedback on issues discussed at the last meeting in Botswana earlier this year as well as new developments in the industry affecting member states.
Professor Mahao stated that the petroleum industry was languishing in negative territory as a result of prices of petroleum products which were increasing at a rapid rate. He therefore urged the delegates to explore ways of addressing the challenge and cushion the impact on customers in the Customs Union.
“These meetings are meant to ensure that there is an efficient supply and distribution of petroleum products to and within the member states,” Professor Mahao said.
“The price of crude oil has been very high for some time and that has resulted in price hikes in the SACU region, worsened by the Russia and Ukraine conflict and now the Israel and Palestine war. Before the dawn of Covid-19 pandemic and the Russia and Ukraine conflict, the price of a litre of petrol was almost half of what it is now. The price has almost doubled. Indications are that this is going to continue to be the case in future.”
“The Russia/Ukraine war has taught us that the world is no longer the same and the normal price cushioning mechanisms are no longer adequate. This means we have to explore other ways of reducing the impact of high oil prices,” he said.
“In Lesotho, we are thinking of setting up a stabilization fund for purposes of assisting consumers in difficult times when there is a crisis in the security of petroleum products, just like now. The ideas of having specialized funds during difficult times are becoming more important now.”
The government has hired a consultant, Enigma Inc, to develop a system called Centralised Information and Procurement system which will deal with the procurement of petroleum products in the country.
Presenting on the system, Enigma Inc’s representative, Saleem Ishmael, said the system would collect information on the petroleum sector and allow procurement of petroleum products from key suppliers and storage depots.
He said it would also improve access and timeliness of information which would help the Petroleum Fund to proactively address issues in the petroleum sector.
“The system will enable the Petroleum Fund to monitor the import and distribution of petroleum products throughout the country and also allow the community to provide feedback on retailers including highlighting shortages,” Mr Ishmael said.
General manager of one of the local retailers, Puma Energy, Stephane Nuetsha, said Lesotho’s major problem was lack of refineries hence it relied on imports. He urged the country to address the issue in order to address the supply challenges and reduce fuel prices.
