Seithati Motšoeneng
THE Petroleum Fund has moved to demystify how fuel prices are determined, highlighting global market forces, domestic logistics, and government levies as key drivers behind what consumers ultimately pay at the pump.
This emerged during a media symposium held in Maseru on Thursday, where journalists were taken through the intricate fuel pricing framework in Lesotho, from international sourcing to retail distribution.
The forum was intended to enhance the quality of petroleum reporting, promote transparency, and build public trust in the mechanisms used to regulate fuel prices in Lesotho.
Officials explained that fuel prices in Lesotho were not arbitrarily set, but were derived from a structured pricing model that reflected real economic costs. At the centre of this model is the Basic Fuel Price (BFP), which represents the cost of importing fuel into the country based on international oil prices, shipping, insurance, and exchange rate fluctuations.
Because Lesotho was entirely dependent on imported petroleum products and global crude oil prices, the strength of the Loti/Rand against the US dollar had a direct and immediate impact on domestic fuel prices.
Beyond international costs, domestic factors such as storage, transportation, and distribution also played a significant role. Fuel was transported from regional depots to service stations across the country, with logistics costs influenced by distance, terrain and infrastructure conditions. All these factors inputed the final costs of fuel.
Additionally, the final pump price includes regulated industry margins to sustain oil companies and service stations, as well as statutory taxes and levies such as the road maintenance levy, oil levy, and value-added tax (VAT). According to the Fund, these components collectively ensure cost recovery, infrastructure financing, and government revenue generation.
The Fund emphasised that this pricing structure was designed to balance multiple objectives — ensuring fuel availability, maintaining affordability, and supporting economic stability.
Addressing the gathering, the Fund’s Chief Executive Officer, Advocate Makananelo Kome, underscored the importance of accurate reporting on such a complex subject, urging journalists to deepen their understanding of the petroleum sector.
“…. We deeply appreciate the critical and central role the media plays in informing the nation and shaping public understanding. This engagement is intended to be a platform for collaboration, learning, and open dialogue,” Adv Kome told the assembled scribes.
She stressed that fuel pricing remained a critical issue affecting every Mosotho, given its ripple effects across the economy.
“The petroleum sector remains central to Lesotho’s economy and daily life. It directly affects transport, the cost of living, and overall economic stability. Simply put, petroleum issues affect every Mosotho, whether directly or indirectly.”
Adv Kome thus underscored that fuel prices were influenced by a combination of international and domestic variables, reinforcing the need for informed public communication.
“Petroleum pricing and supply systems are not always easy to interpret. They are influenced by several factors, including global oil prices, exchange rates, transport and logistics costs, as well as taxes and levies. It is important to emphasise that pricing is based on structured mechanisms, not arbitrary decisions.”
She also pointed to the complexity of the supply chain, noting that fuel passed through several stages before reaching consumers.
“Equally important is understanding the petroleum supply chain, from source to pump. This includes importation, transportation, storage, and distribution. Each stage presents its own challenges, which are important for accurate reporting.”
She said the symposium formed part of the Petroleum Fund’s broader initiative to strengthen engagement with the media and improve public understanding of petroleum governance and pricing.
Adv Kome called for responsible journalism, warning that misinformation on economic issues such as fuel pricing could have far-reaching consequences.
“Reporting on petroleum and economic matters requires fairness, accuracy, and responsibility, as misinformation can have serious consequences on public confidence and national stability.”