The Ministry of Mines and Energy has announced that fuel prices will remain unchanged for the month of February despite recording under-recoveries of 85 cents and 43 cents on petrol and diesel respectively.

Under-recovery is the gap between the local price of fuel and what would have been the price if the fuel were imported.

In a media release availed to Nampa on Friday, the ministry said the fuel prices in Walvis Bay will remain at N.dollars 20.65 per litre for diesel and N.dollars 18.28 per litre for petrol.

“The ministry is aware of the difficult economic situation which affects fuel consumers. Therefore, it will continue to make all possible interventions to always ensure domestic oil market stability. The National Energy Fund will absorb the under-recoveries on behalf of fuel consumers,” the statement said.

It further noted that international oil prices are failing to find a consistent direction over an extended period, especially over the last 24 months.

The ministry also said that with the reopening of the Chinese economy, the global oil demand is predicted to rise to at least 101.7 million barrels per day, and many oil suppliers will be capitalising on that by offsetting the higher demand through higher prices.

Meanwhile, the market is also bracing itself for new shocks due to the introduction of the European Union’s embargo on Russian oil, which is expected to contribute to further increases in oil prices due to scarcity.

“The oil market is caught in a situation where demand is rising at an unprecedented pace while supply constraints remain. The many uncertainties surrounding oil demand and supply will continue to influence oil prices in unexpected ways,” the statement added.

Other factors that were taken into consideration include the exchange rate between the Namibian Dollar and the US Dollar (USD) and the average price increase of unleaded petrol 95 over the period of 01 to 20 January 2023, which is eight USD, while that of diesel 50ppm is five USD per barrel over the review period.

(NAMPA)

Source: The Namibian Press Agency