Staff reporter
THE Ministry of Mines and Energy announced a fuel price increase of N$2,50 per litre for petrol and N$1,50 per litre for diesel, which will come into effect on 1 June.
The new pump price for Walvis Bay will be N$20,40 per litre for petrol and 21,43 per litre for diesel and the fuel prices for the rest of the country will be adjusted accordingly.
“The international oil market continues to remain in a great deal of turmoil. This is evident because global petrol and diesel prices have been increasing to record highs without showing any sign of reductions,” the deputy minister of Mines and Energy, Kornelia Kashiimbindjola Shilunga, said.
Shilunga said this is because the global refining capacity has fallen significantly since 2020 due to the Covid-19 pandemic. This, she explained, is worrying because the global oil supply is failing to catch up, while the world demand for oil has increased.
Shilunga also announced that global supply is expected to tighten even further as oil markets are seeing an upward pricing trend due to the pending import ban by the European Union (EU) on Russian crude.
“The EU has proposed a new package of sanctions against Russia due to the events in Ukraine, including a total ban on oil imports in six months. Although these measures have not yet been adopted, these sorts of announcements only serve to further stoke fear of an oil supply crisis globally,” Shilunga explained.
Shilunga further highlighted that the average price for unleaded petrol 95 has increased by USD16 from 1 to 20 May, as prices went from USD126,260 per barrel to USD142,781 per barrel during that period. She further added that the average price of diesel also saw an increase, going from USD150,117 per barrel to USD 152,147 per barrel during May.
Furthermore, she said that the exchange rate figures indicate that the Namibian Dollar recorded a huge drop against the US Dollar of N$15,9606 per USD.
“The huge currency depreciation entails that the business of conducting international transactions become more expensive,” Shilunga continued.
Considering this, she explained, the ministry recorded a significant under-recovery of 280 cents per litre for petrol and an under-recovery of 156 cents per litre of diesel. She added that these under-recoveries, which amount to approximately N$179 million, will be covered by the National Energy Fund (NEF) on behalf of fuel consumers through the fuel equalization levy.
“The Ministry is aware that the public is under a lot of financial pressure as far as the price of fuel is concerned. However, the public is reminded that Namibia is a price-taker in the international oil market. It is therefore important to understand that the Government is only in direct control at the level of the domestic levies, taxes and margins regarding the price of fuel,” Shilunga added.
