Diesel price drops with 40c per liter – petrol remains unchanged

The price of diesel is decreasing by 40 center per liter on one minute past midnight tomorrow, 7 October. The petrol price remains unchanged.

The Namibian Ministry of Mines and Energy made this announcement on Wednesday and said there is a current under recovery of 62,6 center per liter on diesel. That means diesel’s pump price per liter is higher than the import price per liter.

Over-recoveries are spiraled down on consumer in the form of lower fuel prices. An under-recovery, which is the opposite scenario where the pump price is lower than the price per liter at which the fuel is imported, is balanced with a fuel price increase on the consumer.  The Ministry in its statement said international crude oil prices remain low as the global economy remains strained. Low crude oil prices means lower fuel prices.
At the same time the South African Rand gained strength against the global trade currency, the United States Dollar. A strong Rand means fuel is bought on the international market at a cheaper price per liter.
These two factors positively influenced diesel prices, but the petrol price on the world market remains unmoved. Diesel is the main fuel driving economies worldwide. As long as economies remain subdued, less diesel is consumed and that leads to market surpluses and a drop in price.
Hence only a downward adjustment on the diesel price and the petrol price remaining unchanged.
At Walvis Bay, which is the fuel point of import, diesel will cost N$11,58 per liter and petrol remains unchanged at N$11,65 per liter.