Industry

Fuel price forcing households to cut to the bone

Summary

With the continuous skyrocketing global fuel prices, Namibians will have to prioritise on basic necessities for their households to make ends meet, as the global crisis threatens livelihood and social stability.On 01 July 2022, the Ministry of Mines an…

With the continuous skyrocketing global fuel prices, Namibians will have to prioritise on basic necessities for their households to make ends meet, as the global crisis threatens livelihood and social stability.

On 01 July 2022, the Ministry of Mines and Energy announced the new fuel price increase of diesel costing consumers N.dollars 22.77 and petrol N.dollars 22.28 per litre in Walvis Bay effective 06 July 2022, including the adjusted fuel price for the entire country.

In an interview with Nampa, the ministry’s economist under the directorate of petroleum affairs, Abednego Ekandjo said the international oil price driven inflation has resulted in the general price increase of goods and services, stressing that households will have to prioritise and cut budgets significantly to make ends meet.

“It is a very difficult situation for the ordinary Namibian considering that wages and incomes have been stagnant for a number of years now. The cost of living has gone up and consumers will have to dig deeper in their pockets, luxuries will have to be cut out and crucial needs prioritised,” emphasised Ekandjo.

He explained further that business revenue and profitability will be affected due to a decrease in consumption spending, noting that this will result in a further negative impact on tax collection and employment due to retrenchment.

“Unprofitable businesses will either have to retrench workers or declare bankruptcy and shut down. The situation looks very ripe for an economic recession and the government will have to seriously reconsider how to spend its resources and this is where the matter of prioritisation is key,” he noted.

A 22-year-old woman who sells beef and goat meat (kapana) and vetkoek in Okahandja Park informal settlement in Windhoek, told Nampa on anonymity that the inflation has affected business drastically, such as with the high price of cooking oil - previously a 10 litre can of oil cost N.dollars 350, now it is N.dollars 500.

“The only way to make profit is to increase the prices but customers are complaining and business is going down. So the money used for saving as my profit now I’m adding to the cooking oil,” she said.

Another vendor selling fruit and vegetables said customers are now buying the necessities only and in small quantities, noting that per day he could sell a box of apples but currently customers are only interested in essential foods such as onion and tomatoes.

“Per day I could sell produce of N.dollars 500, but now basically I’m just selling for my N.dollars 1 500 business rental, I take home nothing while I keep busy hoping for things to change,” said the 36-year-old man.

Ekandjo stated that the government will have to halt all its projects and programmes that are not very urgent and focus on ensuring that citizens have access to the basic necessities of life such as food, water, medicine, electricity, fuel, safety and security.

“It is high time that we as a country start investing heavily in our own sectors and industries such as agriculture and energy to ensure food security and energy supply through import substitution,” the economist said.

Source: The Namibian Press Agency