Fuel fund sets record straight: We don’t supply petrol, we police the price

Moves to dispel public confusion as rising fuel costs drive up transport fares and basic goods prices across Lesotho

MPOLOKENG THABANE

MASERU – With fuel prices climbing and Basotho feeling the pinch at the pump, at the taxi rank, and in the grocery aisle, the Petroleum Fund has taken the unusual step of clarifying exactly what it does – and, just as importantly, what it does not do.

Speaking at a media forum in Maseru last Friday, top officials moved swiftly to quell persistent public confusion over who is responsible for the supply and pricing of petrol in Lesotho. The message was blunt: the Petroleum Fund does not directly supply fuel to the market.

Instead, its mandate is focused on two core functions: overseeing fuel pricing structures and monitoring the entire petroleum supply chain to ensure stability and efficiency. In short, the Fund acts as a regulator and watchdog, not a fuel importer or distributor.

The clarification could hardly have come at a more sensitive time. Fuel prices continue to have a visible and painful impact on the cost of living across the country. Many Basotho are feeling the effects through rising transport fares, which have gone up in lockstep with diesel and petrol costs, and through increasing prices for basic goods such as maize meal, bread, and cooking oil.

Every litre of fuel that becomes more expensive ripples outward through the economy.

Yet despite the central role that fuel plays in daily life – from commuting to work to farming to running small businesses – public understanding of how the system actually operates remains remarkably limited. That knowledge gap, officials said, has allowed misinformation to spread.

Addressing journalists at the forum, Chief Executive Officer, ‘Makananelo Kome, described the petroleum sector as a key pillar of the national economy, influencing business activity, household spending, and overall economic stability.

She acknowledged that the technical nature of petroleum pricing and supply systems often makes it difficult for ordinary citizens to fully grasp how the price at the pump is determined. Technical jargon, opaque supply chains, and the sheer number of actors involved – from international oil traders to local transporters – create a fog that few have the time or tools to penetrate.

Kome explained that fuel pricing in Lesotho is based on a structured, transparent model that takes into account a range of factors. These include international oil prices, exchange rate fluctuations (particularly the Rand/Dollar and Loti/Rand relationship), freight and logistics costs from coastal refineries, domestic transportation expenses within Lesotho, industry margins for wholesalers and retailers, as well as government-imposed taxes and levies.

All of these components are calculated and combined to form the final pump price paid by consumers. The Fund’s role is to verify these inputs, monitor compliance, and ensure that no single actor unduly inflates prices. What the Fund does not do is own a single drop of petrol or diesel.

Operations Department representative, Lebohang Makhoali, provided further detail, noting that the pricing model is deliberately designed to reflect real economic conditions while maintaining a stable and reliable fuel supply across the country.

He said the model seeks to balance two sometimes competing goals: affordability for consumers and the need to ensure that fuel remains consistently available – even when global markets are volatile.

“Transparent pricing is critical because fuel costs influence inflation, transport expenses, and broader economic activity,” Makhoali said. “When people do not understand how a price is set, they may assume the worst. That is why we are speaking directly to the media and, through you, to the public.”

According to Makhoali, global market forces – particularly international oil prices and currency movements – are among the most significant drivers of fuel price changes. Lesotho, as a landlocked and price-taking nation, has limited control over these fluctuations.

When the price of crude oil surges on world markets or when the loti weakens against major currencies, local authorities can do little except apply the formula and absorb the political pressure.

The forum also highlighted the complexity of the petroleum supply chain, which involves multiple stages: importation (usually through South African refineries and ports), transportation by tanker into Lesotho, storage at bulk depots, and finally distribution to retail filling stations across the ten districts.

Officials said each stage presents its own logistical and financial challenges – from road safety risks to storage capacity constraints – all of which contribute to the final cost of fuel. The Petroleum Fund monitors each link in this chain to identify bottlenecks, prevent artificial shortages, and recommend policy adjustments when necessary.

In addition to clarifying pricing mechanisms, the Petroleum Fund used the forum to emphasize its commitment to accountability and transparency. Officials said strengthening communication with the media is a key part of ensuring that accurate and reliable information reaches the public, not just during times of price hikes but as a matter of routine.

The engagement, attended by journalists and other stakeholders, focused on improving understanding of petroleum governance and building capacity for reporting on economic issues. It is part of ongoing efforts to bridge the gap between technical industry processes and public knowledge.

However, even as officials presented these explanations, questions remained about how effectively such information is communicated to the general public. A well-attended media forum in Maseru is one thing; reaching a herder in Mokhotlong or a market vendor in Quthing is another.

For many Basotho, fuel pricing continues to appear complex, opaque, and difficult to interpret – even as its effects are felt on a daily basis. Observers note that while forums such as this provide important explanations, translating technical information into clear, accessible messages for ordinary citizens remains a significant challenge.

Without that translation, misunderstandings about the role of institutions like the Petroleum Fund are likely to persist.

One journalist at the forum asked pointedly: “How will a commuter in Teyateyaneng know that you are not the one setting the price?”

The response from officials acknowledged the gap and promised more outreach, including radio broadcasts in Sesotho and simplified public guides.

While the Petroleum Fund expressed confidence that continued engagement with the media will improve public awareness, the effectiveness of these efforts will depend on how well information is simplified and shared beyond formal platforms – far beyond the boardroom and the press release.

As fuel prices remain a sensitive issue affecting both households and businesses, improving public understanding of how the system works is expected to play a key role in building trust and reducing misinformation in the sector.

For now, the Fund has made its position clear: it does not supply a single litre of fuel, but it is determined to ensure that every litre is priced fairly.