By Matṧeliso Phulane
The ministry of natural resources through the department of energy says significant strides have been made in the petroleum industry, necessitating a review of the 1999 regulations which have been described as ‘outdated’.
Speaking at a workshop in Maseru on Tuesday this week, the minister of natural resources Mohlomi Moleko pointed out that the current petroleum regulations no longer serve the industry well, given the rate at which the industry has grown.
“The ministry through the department of energy, as the regulator, has been experiencing formidable challenges in trying to keep pace with the latest developments happening in the industry.
“This then compelled the department of energy to review the 1999 regulations governing the importation of petroleum products.
“Initially when the process started, the aim was to have the current regulations reviewed, but along the process it was realised that a total repeal of the regulations was necessary,” Moleko said.
He further explained that among others, the Lesotho energy policy has as one of its objectives, facilitating meaningful participation of indigenous Basotho in the industry.
“It is for this purpose that we seek to enhance meaningfully participation of Basotho in the industry. The policy statement 12 specifically reserves retailing and local transportation for Basotho.
“This is also in-line with the ministry of trade and industry’s recently published business licensing and registration regulations 2020,” he urged.
“These regulations have identified retail sale of household fuel, bottled gas and coal as well as supply of liquefied petroleum gas and petroleum products at retail as businesses reserved for local Basotho. As a result, the draft regulations review should facilitate that,” he warned
Moleko continued: “I challenge you to have this in mind when interrogating the document. The regulations should maximise participation of Basotho without compromising the security of supply. Also, safety and environmental issues which are very pertinent in this industry should be taken into consideration.”
He highlighted different types of licenses envisaged by the new regulations. They are oil refinery, oil recycling and blending, oil transporters, oil retail, special petroleum product permit, petroleum products consumer, illuminating paraffin bulk tank and oil lubricants
“The draft regulations even outline procedures to be followed, application fees and fines. Our view is by taking this route, we will have an efficient and effective industry capable of addressing pressing needs of the country,” he concluded.
Speaking of the challenges facing the petroleum sector, the petroleum officer of the department of energy ‘Makhauta Fosa, said the regulations stipulated that for a company to be allowed to import petroleum product in the country, such company should have a combined storage of 500 00 litres of storage.
Therefore, the understanding is that combined storage compromises independent storage per product that are all gathered but that is not explicit in the regulations, Fosa noted.
She expressed that storage facility and the number allowed for them per company are not clearly stated in the regulation and that weakens the regulations.
“Some oil companies or those aspiring to enter the country are proposing to have many facilities scattered all over the country.
“As a result capacity of the storage facility have to be revised considering the fact that the current set capacity can only sustain the country for two days.
“This therefore places the country at a great risk if there might be any industrial instability in South Africa,” Fosa said.
In addition, the issuance of license should clearly stipulate a checklist to be considered before recommendation can be made to the ministry of trade and Industry and that it should be renewed when a licence is renewed
Therefore, regulation should clearly mention the obligation expected from the licensee and consequences thereof if obligations are not fulfilled, she told the gathering.
She added that, in the regulation the ownership of some storage facility is also not clearly defined.
“We have had cases where companies have been given licences upon providing evidence that they have agreements with mining companies to use their storage facility, notwithstanding the fact that the said storage facility was basically intended to ensure security of product for the mine,”Fosa indicated
She stated that oil companies are already threatening to take the department to court as a result of this.
She advised that key players like oil companies should be restricted at wholesale so as to allow more Basotho to participate at other levels such as retail and transport.
“Transportation of these products from the depots to their prescribed destinations in the country should be undertaken by Basotho transportation companies.
“The regulations do not address any standards to be adhered to, hence the need for the review of fuel and service control (importation of petroleum products) regulations 1999,” she suggested.
