Niël Terblanché
Namibian consumers will feel some financial relief after the Ministry of Mines and Energy announced a decrease in fuel prices.
The price of petrol in Walvis Bay will drop to N$22.20 per litre, 50ppm Diesel to N$21.57 per litre, and 10ppm Diesel to N$21.67 per litre.
Effective from 3 July, the downward adjustment of fuel prices follows a comprehensive review of the global oil market and local pricing dynamics, reflecting recent trends in oil prices and the Namibian Dollar’s exchange rate.
According to the energy ministry, a notable decline in oil prices to a four-month low, driven by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) was at the root of the decision.
The ministry said in a statement that during their recent meeting, OPEC+ members resolved to maintain production levels steady until the end of 2025.
This stability in production, coupled with ongoing concerns about the global economic outlook, has resulted in decreased consumer confidence, further influencing market sentiment and oil prices.
According to the Ministry, the average price of Unleaded Petrol 95 in June 2024 stood at US$94.73 per barrel, a significant reduction from US$98.835 per barrel in May 2024.
Diesel prices also saw minor declines, with Diesel 50ppm averaging US$94.48 per barrel in June, down from US$94.529 in May, and Diesel 10ppm decreasing to US$94.0865 per barrel from USD95.174 in the same period.
“These decreases, although modest for diesel, have contributed to the overall decision to lower fuel prices in Namibia,” the ministry said.
The Namibian Dollar’s exchange rate, which showed a slight depreciation of 0.13% against the US Dollar during June 2024, had a minimal impact on the price adjustments.
The Ministry’s pricing model indicated over-recoveries of 120.857 cents per litre for petrol, 96.398 cents for 50ppm Diesel, and 111.915 cents for 10ppm Diesel, enabling the announced reductions.
In addition to the price cuts, the Ministry has decided to increase the industry margin by 23 cents to 189 cents per litre.
“This adjustment is essential to ensure that oil companies maintain a fair return on their investments,” the ministry said.
The dealer’s margin for service station operators will also rise by 9 cents per litre to 192 cents per litre, supporting the viability of these businesses.
The Ministry has also revised the road rates in the ready reckoner by 153 cents to facilitate the efficient distribution of fuel across the country.
“This increase is crucial for maintaining a stable and reliable fuel supply chain, especially in remote and underserved areas,” the ministry said.
The Ministry stated that these changes reflect the broader goal of aligning fuel prices with global market conditions to benefit consumers while ensuring supply security.
