Fuel price increase – brace for more fuel hikes and higher inflation….

Global crude oil prices could surpass USD71 by mid-year

The rapid recovery of the global economy, in the wake of the Covid-19 global pandemic, is the major drive behind the 80 cents per liter fuel price increase for both petrol and diesel that hit Namibia on Wednesday.

In a statement the Ministry of Mines and Energy said the fuel price increase is expected to have a negative effect on consumer prices. Fuel price increases result in higher transport costs to get commodities to the consumer.
As the global economy opens up, the demand for crude oil is sharply rising. Crude oil producers have been scaling down crude oil production since the Covid-19 pandemic hit at the beginning of 2020.
Crude oil producers could not predict with certainty when or at what pace the world economy would open up again. That meant cutting crude oil outputs to such an extend that as the world economy is recovering now, there is a crude oil shortage. Oil prices could again hit the USD68 per barrel by April and USD71 by May, explains the Ministry in a statement.

The crude oil shortage is currently so intense that the positive fluctuation between the Namibian Dollar against the US Dollar in recent months could not cushion fuel prices in the country.
The pump price for petrol at Walvis Bay is now N$12,65 per litre and diesel N$12,68 per litre.
Note: fuel prices are adjusted in Namibia on a monthly basis. Should the Ministry’s prediction of the global crude oil prices be accurate, Namibians must brace for more major fuel price increases as from next month.

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