Martin Endjala
Economist Josef Sheehama says that the recently announced hike in fuel prices by the Ministry of Mines and Energy will negatively impact the already struggling consumers.
According to Sheehama, this will trigger inflation and the hike in oil prices will further stifle the growth of the economy through the supply and demand for goods.
He added that the increase in oil prices will depress the supply of other goods due to the increase in the cost of production.
“Oil price increases are generally thought to increase inflation and reduce economic growth. A rise in prices impacts the current account deficit which means the value of imported goods and services exceeds those of exported,” said Sheehama.
He is of the view that the oil prices will continue to push up prices at the pump for consumers and add to inflation across the country’s economy.
The economist stated that the inflation rate would add pressure on the Bank of Namibia to consider increasing interest rates to cool the economy. Adding more pressure to the ordinary person on the street.
A Caregiver at the Gava Children’s Home at Swakopmund in the Erongo region, Veronica //Gawases, expressed concerns about the fuel prices stating that this will have a huge impact on the services she provides for the children.
“We will not cut down on the meals, however, in terms of sports activities, we will not have a choice but to stop some of these activities and other extra activities, all we can do is hope and the lord always provides,” said //Gawases.
She is however hopeful that good Samaritans will continue aiding her, adding that should oil prices continue increasing the situation will only get worse. She hopes that the oil prices will come down for life to go on as normal again.
Samora Machel Constituency Councillor in Windhoek, Nestor Kalola said the transport sector will be heavily impacted, as this will cascade to food delivery and other services.
He said the Council depends on the delivery of food parcels to the communities who require monthly food parcels since only a certain number of people are registered on the food bank list which recently transitioned to cash, at an amount of N$600 per month.
He said they will continue monitoring the situation, but fears that should the oil prices continue to rise, they won’t be able to supply food to the community. Kalola assures that the council will ensure that all communities in need are assisted.
Meanwhile, the Ministry of Mines and Energy on Tuesday announced that the Namport levy is set to increase by two cents per litre, rising from 4.200 to 4.400, as it is adjusted annually. This levy ensures the handling and wharfage services provided by Namport.
In response to these adjustments, the Ministry further announced an increment of 152 cents on petrol prices and an increase of 72 cents on diesel prices per litre.
The Ministry also indicated that the National Energy Fund will absorb the remaining under-recoveries. These adjustments will come into effect on 3 April 2024.
This means that petrol in Walvis Bay will now cost N$22.30 per litre, N$21.77 per litre for diesel 50 ppm while diesel 10 ppm will cost N$21.97 per litre. Fuel prices in other regions of the country will be adjusted accordingly.
The Ministry said that Namibia as an oil importing country is exposed to developments in international oil market prices. Hence the volatility in the supply and demand of fuel in the global oil markets has a notable impact on Namibia’s local fuel prices.
