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Foreigners dominate LP gas industry

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Foreigners dominate LP gas industry

There are currently six importers of Liquefied Petroleum Gas (LPG) with only one of them having a majority citizen shareholding.

This emerged in parliament recently when Shoshong Member of Parliament (MP) Aubrey Lesaso asked the Minister of Minerals, Green Technology and Energy Security, Lefoko Moagi to state the number of gas importers in Botswana, and how many are indigenous Batswana companies, and how many are gas distributors or retail.

In response, Lefoko said the local gas market currently has six importers and 10 known distributors.

“The six importers are Afrox, Easigas, Tswana Gas, Air Liquide, Quick Gases, and Simsa Gas. Information on the shareholding has been sourced from the Companies and Intellectual Property Authority (CIPA) website and it shows that only one company (Tswana Gas) has majority citizen shareholding at 57.4 percent while other companies are foreign-owned,” explained Lefoko.

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The number of gas importers has since been reduced to five following the closure of Quick Gases recently.

Lesaso had further asked Lefoko to state how much in volumes are these companies distributing and how many of these distributors are indigenous Batswana and if the Minister does not see that as a monopoly.

The minister told parliament that out of 10 distributing companies, only one company, Calvin Technology has 100 percent citizen shareholding while the rest are a mixture of citizen and foreign shareholders.

According to figures provided by the Minister, in 2019 the country imported a volume of 21.7 million kilograms of LPG.

“All volumes imported into the country are filled into cylinders of varying sizes (9kg, 14kg, 19kg, and 48kg) and distributed accordingly,” he said.

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However, Lefoko said the current situation in the LPG industry does not qualify as a monopoly.

“Monopoly refers to an instance where there is only one company providing the service,” said the minister

Lefoko described the current market arrangement as oligopolistic, meaning that there are few market players.

Based on this explanation, Lefoko said there is no monopoly in the LPG industry.

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