Niël Terblanché
NAMIBIAN motorists face a sharp increase in spending as the price of fuel has been drastically adjusted upwards for the month of September.
The Ministry of Mines and Energy issued a statement in which it announced that the pump price for petrol will increase by N$1.20 and both kinds of diesel sold in Namibia will increase by N$1.70.
As a result, the pump price for petrol in Walvis Bay will be adjusted to N$20.98 while 50PPM diesel will cost N$20.75 and 10PPM diesel will cost N$20.95. The ministry said that the price will be adjusted according to distance from Walvis Bay.
The ministry stated that Namibia is a price taker in the international oil market, and actions or decisions that emanate from suppliers such as OPEC+ countries have a significant impact on local fuel prices.
According to the ministry, the decision by OPEC+ countries to decrease the supply of crude oil earlier this year has resulted in a decrease in oil inventories.
“The global demand is currently scaling record highs that are boosted along by strong air travel demand, by increased oil use in power generation as well as a surge in petrochemical manufacturing operations in China,” the statement reads.
According to the energy ministry, the average price per barrel of fuel stayed well above US$ 100 during August.
A significant and steady increase in barrel prices was recorded during July and August.
The ministry said that the Namibian Dollar depreciated by almost four percent against the United States Dollar during the review period in August which necessitated the increase in fuel prices to avoid severe under-recoveries by the National Energy Fund.
Despite attempts to avoid under-recoveries, the ministry did indeed record an under-recovery of N$2.40 per litre on petrol and an average of N$3.50 per litre on diesel.
“There is a pressing need to ensure that the fuel prices are best reflective of the market dynamics to ensure the efficient security of supply,” the ministry said in its statement
