The small Southern African Kingdom of Swaziland possesses potential energy resources in the form of hydro-power, biomass and over two hundred million tonnes of coal deposits, yet it has no known oil or gas reserves and so no upstream oil industry. The downstream oil industry is significantly dependent on the importation of energy resources from neighbouring South Africa. South Africa provides 40% of Swaziland’s imported energy demand, 90% of which is represented by petroleum products.

The government plays a limited role in the energy sector, and planning is carried out in the various public institutions and private companies. The Ministry of Natural Resources and Energy takes overall responsibility for national oil matters.

In the country’s energy balance, 23% of its commercial energy is derived from coal resources and 67% from oil. The petroleum market is relatively small, with gasoline and diesel fuel accounting for the bulk of the supply. Kerosene and LPG are used mostly in the household sector.

BP, Caltex, Engen, Shell, and Total carry out the distribution and marketing of oil-derived products in Swaziland.

Since the distribution and marketing of oil products is essentially an extension of the South African oil companies’ activities, the pricing mechanism is similar to that used in South Africa. Gasoline, diesel and kerosene are subjected to regulation whilst the oil companies are free to set the prices of the other products.

The government does not subsidise any product costs and has attempted to ensure that the cost of regulated products reflects the economic cost. However, the tax component is adjusted to reflect social needs. Thus gasoline is taxed much higher than kerosene which is fuel used extensively as a household product. The price of diesel depends on its use – government use is exempt from tax; agricultural use has a low tax rate, whilst bus operators pay more tax than agriculture but less than that paid by small users. Annual petroleum tax revenues represents 19% of government indirect taxes.

Shaun Bakamoso

Greetings. I'm Shaun Bakamoso, and I'm thrilled to be your guide through the dynamic world of business news in South Africa here at mbendi.co.za. With a passion for staying informed and a keen interest in the ever-evolving landscape of business, I've dedicated myself to providing you with timely, insightful, and comprehensive coverage of the latest developments impacting the South African economy. bakamoso@gmail.com / Instagram