Fuel prices to increase on Wednesday

Petrol and diesel prices will increase by 60 cents a litre at one minute past midnight on Wednesday, June 6. This was confirmed late last week in a statement by Minister of Mines and Energy, Tom Alaweendo. The new pump prices at Walvis Bay will be N$12.30 per litre for 95 Octane Unleaded Petrol, N$12.63 per litre for Diesel 500ppm and N$12.68 per litre for Diesel 50ppm.

The results of the latest fuel price review indicates that the oil importers paid more than the prices set by the government to bring fuel products into the country. The final figures recorded are way above the prices set by the government and these pricing under-recoveries are huge enough to trigger upward adjustments in the local pump prices in order to create a balance between the government determined prices and the oil market determined prices, said Alweendo.

He added that the technical analysis of the Basic Fuel Price Unit Rate Slate calculations indicates that due to demand speculation by oil traders and due to OPEC's continuing cuts of oil supply, the average Free On Board prices per barrel sharply increased for ULP 95 and for both Diesel grades. Barrel prices for refined oil traded at an average of US$86.950 for ULP95, US$88.732 and US$ 89.477 for Diesel 500ppm and Diesel 50ppm respectively. The Basic Fuel Price Unit Rate Slate calculations for the past month, therefore, recorded high under-recoveries on the prices of regulated petroleum products.

The average exchange rate was also volatile, which culminated in a depreciation of the N$ against the US$. One US dollar exchanged for N$12.4996 over the period reviewed. The National Energy Fund will step in to absorb about more than 25 percent of the under-recoveries in order to offer partial relief to the consumers at the pumps.

In addition, the ministry has decided to adjust the Road Fund Administration (RFA) levy by 8 c/l from 122 c/l to 130 c/l on all the price-controlled petroleum products. The effective date for this adjustment is June 6, 2018. The RFA is mandated to secure and allocate sufficient funding for a safe and efficient road sector in Namibia.

Also, Namport tariffs for controlled petroleum products have increased by N$2 from N$34 to N$36 per kilo litre, or by 0.2c/I from 3.4c/l to 3.6c/l. The ministry has resolved to also effect this change at the fuel pumps on June 6, 2018.

Namport is mandated to manage, operate and develop Namibia's ports.

Source: New Era Newspaper Namibia