Table of Contents

Chapter 1 – Introduction

• Overview of Botswana’s fuel market.

• Demand drivers: urban growth, rural expansion, tourism, and mining.

• Why fuel retail is a lucrative but highly regulated business.

• The difference between retail, wholesale, and bulk supply in Botswana.

• Key stakeholders: BERA, local councils, Department of Environmental Affairs, and Ministry of Trade.

Chapter 2 – Site Selection & Acquisition

• Factors to consider when choosing a location: traffic counts, proximity to competitors, zoning regulations, and access roads.

• How to conduct preliminary demand studies: the traffic count.

• Legal process for land acquisition: freehold vs leasehold, sub-leases from industrial parks.

• Working with land boards and local councils.

• Common pitfalls: buying land without verifying zoning for fuel retail.

Chapter 3 – Due Diligence & Feasibility Studies

• Commissioning professional market research.

• Feasibility analysis: capital cost vs projected revenue.

• Return on investment timelines for different station sizes.

• Evaluating competition within a 5–10 km radius.

• Considering complementary revenue streams (convenience stores, car washes).

Chapter 4 – Environmental & Archaeological Assessments

• Why environmental impact assessments (EIAs) are mandatory.

• Steps to obtain EIA approval from the Department of Environmental Affairs.

• Requirements for public consultation meetings.

• Addressing concerns about groundwater contamination.

• When archaeological clearance is required (e.g., if the site is near heritage areas).

Chapter 5 – Technical Site Investigations

• Soil testing: checking stability for underground storage tanks.

• Geo-technical surveys: load-bearing capacity of the soil.

• Topographical surveys: understanding slope, drainage, and layout options.

• Using survey results to inform design and construction.

Chapter 6 – Regulatory Approvals & Licenses

• Botswana Energy Regulatory Authority (BERA) retail license process.

• Land board lease approvals.

• Council planning permits.

• Ministry of Trade business license.

• Health & safety compliance certificates.

Chapter 7 – Design & Planning

• Hiring qualified architects and engineers with fuel station experience.

• Master plan: canopy, pump islands, storage tank layout, traffic flow.

• Fire safety plan: submission to the Fire Department for approval.

• Mechanical & Electrical (M&E) drawings: wiring, pumps, lighting.

• Accessibility requirements under Botswana building codes.

Chapter 8 – Civil Works & Infrastructure Development

• Site clearing and grading.

• Underground storage tank installation and testing.

• Piping, pump installation, and canopy erection.

• Driveway and parking layout.

• Stormwater and spill containment systems.

Chapter 9 – Financing Your Project

• Capital requirements: average costs for 2–4 pump island stations.

• Sources of finance: commercial banks, CEDA, and private equity.

• Documentation needed for loan applications.

• Structuring repayment terms in line with cash flow projections.

Chapter 10 – Partnership Models with OMCs

• How to partner with established Oil Marketing Companies (OMCs) like LECHA, Puma, Shell, and Total.

• Brand licensing vs. dealer-owned, dealer-operated models.

• Pros and cons of exclusive supply agreements.

• Negotiating margins and marketing support.

Chapter 11 – Construction & Project Management

• Selecting experienced contractors for petroleum infrastructure.

• Quality control measures during construction.

• Compliance inspections at key stages: tank testing, pump calibration.

• Managing timelines to avoid costly delays.

Chapter 12 – Retail Operations Setup

• Obtaining a trade license from the Ministry of Trade.

• Hiring station managers and pump attendants.

• Setting up POS systems and inventory control.

• Supplier arrangements for lubricants, LPG, and convenience store stock.

Chapter 13 – Staffing, Training & Safety Compliance

• Recruiting and vetting staff.

• Training programs on fuel handling, customer service, and cash management.

• Safety drills for fire and spill incidents.

• Meeting BERA’s ongoing compliance requirements.

Chapter 14 – Marketing & Business Launch

• Pre-launch advertising: radio, flyers, social media.

• Grand opening events: discounts, community engagement.

• Building loyalty programs for truckers and taxi operators.

• Signage and branding visibility.

Chapter 15 – Post-Launch Operations & Performance Monitoring

• Daily sales tracking.

• Monthly margin reviews.

• Preventive maintenance schedules for pumps and tanks.

• Seasonal pricing strategies.

Chapter 16 – Case Studies & Lessons Learned

• Example 1: Rural filling station success stories.

• Example 2: Urban station with strong convenience store sales.

• Common mistakes new entrants make and how to avoid them.

Appendices

• List of Botswana regulatory agencies for fuel.

• Sample BERA retail license application requirements.

• Template project budget and cash flow forecast.

• Health & safety compliance checklist.

Botswana’s fuel retail market is small in absolute size compared to South Africa, but it is strategically important, tightly regulated, and remarkably resilient. Because the country imports 100% of its refined petroleum products, the sector sits at the intersection of international oil dynamics, currency movements, and domestic regulation. For entrepreneurs, operators, and financiers, understanding how these forces interact—from licensing to logistics to margins—is essential before breaking ground on a new filling station or diesel depot.

1) Market Structure at a Glance

Supply chain:

• International refined products (mainly from South Africa, Namibia, and Mozambican terminals) move by pipeline, rail, and road to inland depots, then by road tankers to Botswana depots and filling stations.
  
  

• Primary storage is limited; this magnifies the impact of cross-border logistics reliability and exchange rate moves.
  
  

• Distribution to retail forecourts is done by Oil Marketing Companies (OMCs) and licensed wholesalers via contracted transporters.
  
  

Industry participants:

• Regulator: Botswana Energy Regulatory Authority (BERA) regulates licensing, safety standards, retail/wholesale margins, and price build-ups.

• Botswana Oil Limited:  BOL is a state-owned oil company with a license to import 90% of Botswana's fuel needs; the other 10% is reserved for citizen-owned oil companies (COOC) like LECHA Energy.

• COOCs: These import and distribute petroleum products to non-branded filling stations and wholesale depots. 
  
  

• OMCs: Multinational oil companies buy their products from BOL and distribute them often on exclusive supply agreements to dealers operating branded filling stations.
  
  

• Dealers/retailers: Operate filling stations under branded supply contracts (Dealer-Owned Dealer-Operated, Company-Owned Dealer-Operated, or Company-Owned Company-Operated).
  
  

• Support ecosystem: Engineering firms, EIA consultants, metrology and calibration services, HSE specialists, POS/payment providers, and convenience retail suppliers.
  
  

2) Demand Drivers & Consumption Patterns

• Transport backbone: Diesel dominates commercial transport (intercity buses, taxis, trucking, mining, agriculture). Petrol serves light vehicles and private mobility.
  
  

• Import-led economy: Most goods arrive by road; freight intensity links diesel demand to overall economic activity.
  
  

• Urbanization & corridors: Gaborone–Francistown and north–south highways concentrate volumes; border towns (Kazungula, Tlokweng) benefit from transit traffic.
  
  

• Non-retail consumption: Mines, farms, construction, and remote operations buy bulk diesel, sometimes via on-site tanks or mobile solutions.
  
  

Seasonality:

• Mining and construction cycles, tourism peaks, and agricultural planting/harvest periods can create mild demand seasonality.
  
  

• Cross-border price differentials can shift volumes at border stations.
  
  

3) Pricing Mechanics & Profit Pools

Pump prices are set through a regulated price build-up that typically includes:

• Cost of product at the import point (CIF),
  
  

• Exchange rate conversion (USD/BWP),
  
  

• Freight, insurance, storage losses, and inland transport,
  
  

• Regulated wholesale and retail margins,
  
  

• Levies, taxes, and statutory fees.
  
  

Stabilization: Botswana has used a fuel price stabilization mechanism/fund to smooth sudden increases driven by global prices or currency weakness. This improves consumer price predictability but can create timing gaps between actual import costs and retail pump prices.

Margins:

• Wholesale margin accrues to importers/wholesalers.
  
  

• Retail margin accrues to station operators/dealers.
  
  

• Because margins are regulated, volume, operational efficiency, and non-fuel income (C-store, car wash, QSR/food-to-go, lubricants, LPG) drive profitability more than per-litre price spreads.
  
  

Key implication: Operators cannot “price their way” to profit. They must sell more litres, control shrinkage, and grow basket size inside the shop.

4) Regulations & Approvals—What Really Matters

Licensing & compliance (high level):

• BERA licensing for wholesale/retail operations (fitness, safety, and capability criteria).
  
  

• Environmental approvals (EIA/Screening) from the Department of Environmental Affairs, with public consultation where required.
  
  

• Town & Country Planning approvals for land use, building permits, and signage.
  
  

• Fire & emergency compliance (design review, firefighting systems, emergency response plans).
  
  

• Weights & measures/metrology (pump calibration, seals, routine inspections).
  
  

• Occupational health & safety (training, PPE, hazardous substances management).
  
  

• Trade license (after construction for operating the retail/commercial activities).
  
  

Design standards:

• Double-walled tanks or approved UST systems, compliant piping, overfill/spill protection, interceptors, earthing/bonding, hazardous zones electrical specs, and stormwater/environmental controls.
  
  

• Accessibility, traffic ingress/egress, canopy height for HGVs (diesel lanes), and clear separation between tanks, dispensers, shop, and neighbouring plots.
  
  

Timeline reality: Approvals are sequential and often interdependent; front-load design quality and stakeholder engagement to avoid re-submissions. 

5) Competitive Landscape & Site Economics

Network density: Major urban centres have relatively dense networks; greenfield opportunities persist in growing suburbs, new industrial parks, tourism gateways, and along under-served transport corridors.

Formats:

• Full-service stations with multiple islands, forecourt services, and a sizable convenience store.
  
  

• Compact neighbourhood sites with 2–3 islands and small C-store.
  
  

• Diesel-heavy transit sites with HGV lanes, high canopies, and bulk lube/LPG.
  
  

• Mobile/containerised diesel depots for remote operations.
  
  

Capex drivers:

• Land (purchase/lease), groundworks, tanks & piping, canopy, dispensers, shop building, cold chain, POS, security/CCTV, signage/branding, and external works (driveways, drainage).
  
  

• Upfront professional fees (EIA, geotech, architecture/engineering), permits, and connection costs (power/water/telecoms).
  
  

Opex drivers:

• Staff, utilities (power significant for refrigeration and lighting), maintenance, insurance, security, card/acquirer fees, calibration, and marketing.
  
  

• Fuel inventory financing and working capital (lead times, payment terms).
  
  

Unit economics (directional):

• Gross margin per litre is regulated; volume scale (diesel lanes, fleet accounts, bus/taxi trade) and C-store gross margin (typically higher than fuel) determine EBITDA.
  
  

• Best-in-class operators raise non-fuel revenue to 25–40% of gross profit through modern convenience retail, quick-serve food, lubricants, LPG, and value-added services (air/water/ATM/parcel lockers).
  
  

6) Logistics & Reliability

Cross-border dependency: Any disruption in South African/Mozambican supply, strikes, or port/rail issues can ripple into Botswana. Exchange-rate swings (USD/BWP) alter landed costs.

Mitigations for retailers:

• Multiple-supplier frameworks (within regulatory and contract limits),
  
  

• Accurate demand forecasting and reorder points,
  
  

• Larger on-site storage (subject to EIA/design constraints),
  
  

• Diesel-focused lanes to capture high-volume customers reliably.
  
  

7) Risk Map & Controls

Risk Management at LECHA Energy

• Exchange-rate & global price spikes
  Can squeeze working capital and force sudden retail adjustments.
  Mitigation: conservative cash buffers, phased procurement, and close supplier communication.
  
  

• Regulatory delays
  Lead to cost overruns and missed project openings.
  Mitigation: early scoping meetings, A-grade consultants, and compliant submissions.
  
  

• Construction quality failures
  Cause leaks, rework, and health & safety incidents.
  Mitigation: pre-qualified contractors, inspector sign-offs, and hydrostatic/pressure tests.
  
  

• Shrinkage & wet-stock losses
  Result in margin erosion and profit leakage.
  Mitigation: ATG systems, rigorous reconciliation, nozzle discipline, and staff training.
  
  

• Supply interruptions
  Can cause lost sales and customer churn.
  Mitigation: safety stocks, diversified routing, and tighter delivery SLAs.
  
  

• Security & cash handling risks
  Expose staff and operations to losses.
  Mitigation: cashless promotion, smart safes, CCTV, lighting, and clear procedures.
  
  

8) Strategic Opportunities

1. Blue Ocean in Remote/Project Markets
   Containerised/mobile diesel solutions for mines, construction corridors, and large farms can generate attractive returns with lower capex and faster deployment.
   
   

2. Diesel-First Transit Hubs
   Stations designed for trucks (high canopies, wide turning circles, fast-flow nozzles, driver amenities) capture high-volume litres and lubricants.
   
   

3. Modern Convenience Retail
   Evolving from “shop” to food-to-go (barista coffee, bake-off, quick meals) increases gross margin and dwell time. Partnerships with local bakeries or QSR brands work well.
   
   

4. Solar-Hybrid Forecourts
   Solar + storage can offset daytime shop loads, reduce generator diesel burn, and bolster resilience. Payback improves with rising tariffs and reliable irradiation.
   
   

5. Digital & Fleet Services
   Closed-loop fleet cards, invoicing, geofenced spend, and telematics-linked discounts deepen B2B relationships and smooth cash flow.
   
   

9) Execution Blueprint for New Entrants

Pre-investment (0–3 months):

• High-level market scan (traffic counts, competitor mapping, catchment analysis).
  
  

• Land control (option/lease subject to approvals).
  
  

• Feasibility model: capex, opex, volumes, non-fuel plan, NPV/IRR sensitivity.
  
  

Approvals & design (3–9 months):

• Geotech, topo, EIA screening/full EIA as required; stakeholder consultations.
  
  

• Concept → detailed engineering (USTs, pipework, interceptors, electrical, fire).
  
  

• BERA licensing pathway and town planning/building permits.
  
  

• Brand/supply agreement heads of terms with OMC/wholesaler.
  
  

Build & commission (6–10 months, overlapping):

• Civil works, tanks/piping, canopy, shop shell, electricals, signage.
  
  

• ATG and POS integrations; metrology calibration; fire certification.
  
  

• Staff recruitment & training; SOPs for cash, HSE, wet-stock control.
  
  

Launch & ramp-up (0–6 months post-opening):

• Opening promotions; fleet onboarding; partnerships with taxi/bus associations.
  
  

• Food-to-go activation; loyalty or stamp programs.
  
  

• Tight stock and shrinkage controls; weekly KPI dashboard.
  
  

10) KPIs That Matter

• Fuel litres/day by grade (petrol/diesel) and by lane (HGV vs LV).
  
  

• C-store sales/m² and gross margin %.
  
  

• Wet-stock variance (book vs physical) within tight tolerance.
  
  

• Average transaction value (shop) and basket composition (food share).
  
  

• Uptime (dispensers, POS, power).
  
  

• Cash cycle (days inventory; debtor/creditor days for fleet & suppliers).
  
  

• HSE scorecard (training completion, drills, incident frequency).
  
  

11) Outlook & Trends

• Price stability vs reality: Stabilization policies smooth the ride but defer adjustments—operators should plan for eventual re-alignments when global benchmarks or FX shift materially.
  
  

• Convenience as a differentiator: Stations are evolving into convenience destinations; food offers and clean amenities drive repeat visits.
  
  

• Sustainability & resilience: Solar hybrids, efficient refrigeration/lighting, and water/oil separation best practices reduce opex and risk.
  
  

• Data-driven operations: ATG analytics, POS data, and loyalty insights will separate top-quartile performers from the rest.
  
  

• Selective network growth: Greenfield sites still exist, but brownfield upgrades and format innovation (diesel hubs, mobile stations) often yield better risk-adjusted returns.
  
  

12) What This Means for Investors & Operators

• The market rewards operational excellence, capex discipline, and non-fuel innovation more than speculative pricing.
  
  

• Success requires flawless compliance, reliable supply, and relentless execution on shrinkage control and customer experience.
  
  

• Partnerships—with suppliers, food brands, fleet clients, and financiers—unlock scale and stability.
  
  

Bottom line: Botswana’s fuel retail is a regulated, volume-driven business. The winners combine prime locations, diesel-centric design where relevant, strong convenience retail, and resilient supply/logistics—all wrapped in rigorous HSE and wet-stock control. For those prepared to execute, it offers durable cash flows and defensible competitive moats.