FOR a second month in a row Namibian motorists face a sharp increase in the price for both petrol and diesel when the amount paid for all controlled petroleum products will be raised by 30 cents per litre at one minute past midnight on the first Wednesday of June.
In a statement issued by the Minister of Mines and Energy he states that dealer margins will be raise by six cents per litre. The price for both diesel petrol will be raised by another 26 cents per litre to compensate for the under recovery brought on by the depreciation of the Namibian Dollar against the United Sates dollar from April to May.
The review of fuel prices are based on the trading cycle between April 26th and May 24th.
“The average exchange rate between the two currencies for the trading cycle under review is: N$14.3518 per US$1. In contrast, the average exchange rate for April 2019 as a full month was: N$14.1400 per US$1. Therefore, the latest figure of N$14.3518 per US$1 indicates that the Namibian Dollar has depreciated against the United States Dollar. In other words it has become expensive or it costs a bit more to import fuel to Namibia,” the statement said.
At the end of April the price for petrol was increased by 70 cents per litre while 50 ppm diesel increased by 30 cents per litre.
According to the statement the Dealer Margin Survey Report was recently compiled and submitted to the Ministry for consideration. The results of the report indicated that, on average, the fuel dealers are failing to run their businesses profitably due to inflation and other cost factors.
“Since the fuel dealers operate in a price controlled market, the Government is obliged to review their margin from time to time and adjust it accordingly. Guided by the results of the report and other technical considerations such as the general inflation rate, the Ministry has resolved to increase the Dealer Margin by 6 cents per litre from 100 cents per litre to 106 cents per litre on all controlled products effective 5th June 2019.”
As from next Wednesday fuel pump prices in Walvis Bay will be N$13.05 per litre for 95 Octane Unleaded Petrol while 50ppm Diesel will be adjusted upward to N$13.63 per litre. Fuel pump prices countrywide will be adjusted accordingly.
The decision indicates that the Ministry will not pass on the full under-recoveries to the consumers at the pumps. This means that the remaining portions of the under-recoveries will be paid to the oil companies from the coffers of the National Energy Fund on behalf of consumers.
During April according to the statement, the NEF absorbed about N$112 million on behalf of consumers in under-recoveries during the last trading cycle.