Allexer Namundjembo
The ministry of industries, mines and energy has announced plans to remove the fuel premium currently paid by consumers, saying the move will help lower fuel costs while ensuring a stable supply of petroleum products in Namibia.
In a ministerial statement delivered on 10 June, minister Modestus Amutse said the premium, which has been charged over and above the Basic Fuel Price for the past four years, was introduced because fuel wholesalers argued they could not secure fuel at the regulated price due to the country’s relatively small import volumes.
Amutse said the Basic Fuel Price already includes transportation costs and a profit margin, making the additional premium an extra burden on consumers.
To address the issue, the ministry indicated that the government is implementing a Bulk Petroleum Import Coordination System, which will allow wholesalers to coordinate fuel imports and benefit from economies of scale.
“The initiative forms part of broader efforts to secure more affordable fuel supplies through partnerships with local and international suppliers,” Amutse said.
According to the minister, the government’s assessment has shown that a supervised and competitive import coordination process can eliminate the premium without exposing the state to financial risk.
He said the intervention is necessary because previous efforts by wholesalers to remove the premium independently have not succeeded.
“The removal of the premium that Namibians are currently paying for fuel is now imperative,” Amutse said, adding that the measures are intended to benefit wholesalers, fuel dealers, and consumers alike.
“The Basic Fuel Price is a blended international market price for fuel, to which the relevant costs, such as transport and a profit margin, are then added. The Basic Fuel Price already includes a profit margin and is reflective of the market price of fuel,” he said.
According to Amutse, the government has engaged the industry to make offers to start the competitive process by which this coordination takes place, with the principal objective of removing the premium, while ensuring there is no financial exposure to government.
He said the negotiations are necessitated by the rapid increase in international oil prices and the impending depletion of the National Energy Fund.
“The exercise conducted by government has shown that this objective can be achieved by imposing a supervised, coordinated and competitive process upon the wholesalers,” he said.
He added that this process has been shown to remove the premium to the benefit of the consumer and forms a necessary step toward the implementation of the Bulk Petroleum Import Coordination System.
Calls for lower fuel prices often revive debate around taxes and levies included in the pump price, with some consumers questioning whether the government has ever removed these charges altogether.
While no administration has completely abolished taxes and levies on petrol and diesel, there have been several occasions when relief measures were introduced to cushion motorists and businesses from sharp increases in international oil prices.
Among the most notable interventions was the decision by Cabinet in 2022 to temporarily reduce a number of fuel levies.
The measures included cuts to road user charges, the National Energy Fund levy, the Namcor levy, and contributions to the Motor Vehicle Accident Fund.
The move came as global oil prices surged, placing pressure on household budgets and transport costs.
Parts of the relief package were later extended as authorities sought to moderate the impact of rising fuel prices. However, the fuel tax itself largely remained in place due to its importance as a source of state revenue.
A separate intervention was announced in 2020 when the fuel levy on illuminating paraffin was scrapped.
The measure was intended to reduce costs for low-income households that rely on paraffin for cooking and lighting.
More recently, selected fuel levies were again temporarily reduced or suspended as part of efforts to ease pressure from higher international fuel costs.
Fuel taxes and levies remain an important source of funding for road maintenance, energy security initiatives, and accident compensation programmes.
As a result, the government has historically opted for temporary relief measures rather than the permanent removal of all charges included in the fuel price.
The record therefore shows that while certain levies have been reduced, suspended, or abolished in specific cases, motorists have never seen a complete removal of all taxes and levies on petrol and diesel.
