August 26 Holding Company has defended its fuel supply arrangement, saying it did not take over the fuel supply contract previously held by Enercon, but it was asked by the Ministry in June 2024 to facilitate fuel deliveries to military bases.

 August 26 Acting Chief Executive Officer David Brown says the arrangement was introduced to address a gap between fuel suppliers requiring payment upon delivery and the government's payment processes, which can take between 30 and 120 days.

Under the arrangement, August 26 purchases fuel from approved suppliers, pays them upon delivery, and subsequently invoices the Ministry.

"The Ministry requested August 26 to facilitate the supply of fuel to its bases. Fuel suppliers require payment on delivery, while the government pays within its normal administrative cycle. August 26 bridges this gap by buying fuel from approved suppliers, paying on delivery, and then invoicing the Ministry."

Brown also rejected suggestions that August 26 was awarded or transferred the fuel supply contract previously held by Enercon.

He said the company owned by the troubled Elindi brothers, in which August 26 held a 25% shareholding, had an exclusive agreement with the Ministry to supply fuel to military bases and upgrade fuel facilities.

According to Brown, the Ministry subsequently cancelled the agreement following a breach, while a court ordered Enercon's liquidation and appointed a liquidator.

On fuel prices, August 26 says it has reviewed its petrol and diesel pricing since June 2024.

"The reported fuel prices of N$36 per liter and above relate exclusively to Jet A-1 fuel and should not be confused with the prices of diesel or petrol supplied to military bases. Jet A-1 is not price-regulated, and its price is determined by market conditions."

Questions have also been raised about the company's suppliers and procurement procedures.

Brown noted that August 26 gives preference to major fuel importers and obtains quotations directly.

He said purchases require approval from at least two of the company's three authorised approvers, adding that no single individual can independently authorise a purchase.

Brown explained that transport companies appearing in delivery records are contracted by major fuel importers to transport fuel and do not necessarily supply or sell the fuel.

He further described the use of a truck leased from Botswana by a local fuel supplier as an isolated incident during an emergency delivery when local transport capacity was insufficient.