Fuel price hike

 

floris Steenkamp

The coast’s consumers are not taking lightly the news of yet another fuel price increase to come into effect at one minute past midnight on Wednesday. Namibia’s fuel prices are reviewed on a monthly basis and continues an upward trend.
In a statement yesterday the Ministry of Mines and Energy announced a blanket fuel price in-crease of 50 cents per liter for 95 octane unleaded petrol, diesel 500ppm and for diesel 50ppm.
The rising market price of crude oil and the weakening South African Rand against the US Dollar were provided as the catalysts of the fuel price increase.
The motorist pays N$13,45 per liter for 95 octane unleaded petrol; N$13,78 per liter for 500ppm diesel and N$13,83 for 50 ppm diesel as from Wednesday morning.
“Two major factors affect, adversely, our local pump prices: the international prices for refined oil and the exchange rate between the Namibian Dollar (linked the South African Rand) against the US Dollar in which oil is priced”, said the Ministry in a statement.
According to the press release of the ministry, global oil prices have been rising consistently. A barrel of refined oil stood at US$77 in January this year and in September reached the US$91 mark.
“Predictions are that they are headed to triple digits by the end of the year”, said the ministry in the statement.
With regard to the US$/Namibian Dollar ex-change rate: the Namibian Dollar traded at N$12,20 the US Dollar in January and at N$14,71 in September.
The global market price for refined oil and the exchange rate currently has Namibia’s oil industry in an under-recovery situation. That means it cost oil companies more to deliver fuel to the fuel pump than what the fuel consumer pays. It costs the oil industry N$1,31 per liter more for petrol than what the consumer pays at the pump. Diesel, both 500ppm and 50ppm, is costing the consumer almost N$1,45 less than what it costs to deliver at the pump. These under-recoveries is partly subsidised by the National Energy Fund to the tune of 80 cents per liter.