MBABANE – It appears to be a case of regulator versus government enterprise.
The Eswatini Energy Regulatory Authority (ESERA) has declined an application by the Eswatini National Petroleum Company (ENPC) for a fuel wholesale licence.
Both entities are owned by the Government of the Kingdom of Eswatini. ENPC had applied for the licence to enable it to supply fuel to commercial customers, a move that would have placed it in direct competition with established private players such as Galp Energia, Puma Energy, Eswatini Engen and Total Energies.
ESERA, which is mandated to regulate the energy sector, is responsible for issuing fuel wholesale licences under the Petroleum Act of 2020. It has now emerged that the authority turned down ENPC’s application.
Futhi Mathonsi, the ENPC Marketing and Communications Officer, confirmed that an application had indeed been submitted. She said the company was currently engaging with ESERA on the matter. “We shall be in a position to disclose the details of our application once the process is completed,” Mathonsi said.
She pointed out that Section 24(b) of the Petroleum Act No. 18 of 2020 empowers ENPC to ‘carry out the business of supplying and distributing petroleum products into and from the Kingdom of Eswatini’.
When asked to clarify the nature of its intended commercial customers and whether this included local service stations, Mathonsi described the plan as a ‘strategic initiative currently under consideration’. She added that due to ongoing engagements with potential clients, ENPC could not reveal their identities or numbers at this stage.
Concerns have been raised in the industry that some suppliers are failing to maintain the statutory 14-day fuel reserve stock. Responding to this, Mathonsi said ESERA, as the regulator, was responsible for ensuring compliance with Section 67 of the Petroleum Act. “This question is best addressed by the regulator,” she said.
ESERA has issued Licence Application Review Guidelines, which outline the process and criteria for granting petroleum licences. The authority’s regulatory powers extend to all petroleum entities, including the ENPC. ENPC collects a fuel levy of 35 cents per litre, which goes towards financing its operations.
In its frequently asked questions published in its website, ENPC was called upon to respond how it generates revenue? Responding, the company said it relies on a fuel levy of E0.35 cents per litre of all fuel imports by the various oil companies which operate in the Kingdom of Eswatini.
ENPC said a large proportion of the collected levy (E0.30) is ring-fenced for capital projects, primarily the construction of the strategic fuel reserve facility which will help to stabilise the supply and price of fuel once it has been completed.
To ensure sustainability, the company says it is already exploring other business opportunities in line with its mandate. Another question is whether ENPC produces the petroleum products or it imports them from other countries?
In response, the ENPC states that, like all the other oil companies which are currently operating in Eswatini, it will not be manufacturing petroleum products, but will be sourcing from the various markets. It was also asked whether it shall be sole fuel source for the country? ENPC responded that other oil companies will continue to source petroleum products by themselves.
It said its primary role is mostly to hold strategic stocks, which any fuel company operating in the country can be able to access in the event they have challenges in their supply chain.
On the question of running filling stations, the parastatal said it will not operate them but, in line with its mandate to improve access to petroleum products in rural areas, it will licence them (filling stations) in rural stations. The rural stations will be operated by indigenous emaSwati.
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