Africa-Press – Botswana. Botswana is in a long line of countries set to experience the economic consequences of the potential closure of the Strait of Hormuz that would result in a surge in oil prices and trigger global inflation if Iran made good on its threat to close the transit route of 20 percent of the world’s oil supply.
Botswana and other fuel importing countries that depend on the global fuel transit, the Strait of Hormuz, could feel the economic consequences of the conflict between Israel and Iran as a hike in fuel, transport and food prices looms large.
Botswana’s main fuel suppliers in South Africa are bracing for a spike in fuel prices in July because global oil prices have surged 10 percent since Israel launched strikes on Iran nearly two weeks ago.
In response to airstrikes by the United States early Sunday, Iran has threatened to close the Strait of Hormuz through which 20 percent of the world’s oil supply of 20 million barrels pass per day.
Critical fuel transit route
The strait is a passage between Iran and Oman, which is a transit route for oil and gas supplies mainly to the African and Asian regions.
Botswana imports 60 percent of its petroleum products from South Africa and 40 percent from Namibia and Mozambique.
The potential closure of the Stait of Hormuz would affect the African market at a consumer level because South Africa imports 60 percent of its oil from Iran.
Buffers
The last time fuel prices were adjusted in Botswana was on 13 December 2024. At the time Unleaded Petrol (ULP) 95 decreased by 27 thebe per litre while diesel and paraffin went down by 10 and 15 thebe respectively.
In a televised interview on Monday, international trade expert Kabalano Rampa stated that Botswana is unlikely to feel the immediate effects of the impending fuel crisis.
“We will definitely not experience the effects immediately in regards to our fuel prices going up as there are delayed and buffer effects,” he said.
Alternatives fuel sources
“We will experience them at a later time. It gives us an opportunity to start acting and preparing now.”
Rampa noted that the proposed joint oil refinery deal between Namibia and Botswana could prove critical in the long run but said that it will be some time and cost before it is in place.
He added that Botswana has the capacity to switch to solar and wind energy as alternative sources of fuel. The trade analyst also recommended intra-African trade as a means to mitigating the economic effects of the war.
Source: Botswana Gazette
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