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Fuel price set to increase sharply

Fuel price set to increase sharply

Niël Terblanché

 

A SHARP increase in the price of fuel means that Namibians will have to adjust their budget for yet another increase in the prices of the goods they consume.

 

The Ministry of Mines and Energy in a statement announced that the price per litre of both petrol and diesel will increase by 80 cents.

 

The pump price of petrol will increase to N$12.65 per litre while diesel will increase to N$12.68 per litre in Walvis Bay. The pump prices will be adjusted upwards as the distance between Walvis Bay and other destinations in Namibia increases.

 

Fuel price increase sharply Namibians budget prices

 

According to the energy ministry, the upward adjustment of pump prices will become effective at 00:01 on the 3rd of March 2021.

 

The sharp increase in fuel prices comes after the National Energy Fund had to fork out N$122 million and N$98 million during January and February respectively to fund under-recoveries on national fuel sales.

 

The reopening of economies around the world as a result of large scale rollouts of vaccines against the COVID-19 pandemic saw a sharp increase in the demand for oil and a subsequent increase in the price of oil per barrel.

 

“As the global economy continues to reopen, the demand for oil is expected to continue outweighing oil supplies from OPEC and other major oil producers, causing international oil prices to continue increasing quicker and sharper than expected. This means that if the global oil stocks remain steady over the coming months, refined oil prices will probably hit US$68 per barrel as early as next month and even go to as high as US$72 per barrel in the next three months,” the statement reads.

 

The energy ministry stated that it is cognizant of the fact that an increase in the price of fuel will put more inflationary pressure on the prices of goods and services in the Namibian economy.

 

“However, due to the major dynamics of demand and supply in the international oil market at the present time the demand-side oil price regulators will have to continue making these hard choices,” the statement concludes.

 

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