Fuel Prices remain unchanged for August

According to a media release from the Ministry of Mines and Energy yesterday, the current fuel prices will remain unchanged for August 2017.

Despite OPEC (Oil Producing and Exporting Countries) staying committed to a cut of 1,8 million barrels per day crude oil production output per day for the past six months, the supply of crude still by far outstrips demand.
Cheaper oil means Namibia can buy and import cheaper fuel from spot markets. Hence the current situation where fuel prices remain unchanged. The full statement from the Ministry of Mines and Energy reads: ” a cut of 1,8 million barrels per day of crude oil production output per day for the past six months, the supply of crude still by far outstrips demand.
Cheaper oil means Namibia can buy and import cheaper fuel from spot markets. Hence the current situation where fuel prices remain unchanged. The full statement from the Ministry of Mines and Energy reads:
“The Ministry of Mines and Energy hereby announce, that the fuel pump prices for the month of August 2017 will remain unchanged.
Although OPEC and other producers are complying with the agreement to cut output by 1.8 million barrels per day (bpd) for six months from January, oil prices still held near multi-month lows up to June. The production cut by OPEC has not yet made an impact to the global inventory as US sales has increased and it has become a concern for other oil major producers such as Nigeria. OPEC agreed on Monday this week that Nigeria would join the pact by capping or even cutting its output from 1.8million bpd, once it stabilizes at that level from 1.7 million bpd. The market seems to be much further away from a balanced situation than some had previously forecasted. There is a possibility that oil prices could be headed to the low $40s in the few months to come.The exchange rate between the Namibian Dollar and the US Dollar has weakened during the period under review compared to how it was during the previous month. The average exchange rate for July 2017 was N$13.1203 compared to June’s average of N$12.88. this means that importing fuel to our shore slowly but surely became costly in July, which was not a case in the preceding month of June.In the local market, slight over-recoveries and under-recoveries were recorded on ULP 95 and diesel 500ppm & 50ppm respectively. The month of June saw a big relief at the pumps because the results of the Basic Fuel model were favourable. It is unfortunate, that the slight over-recoveries and under-recoveries recorded for July do not warrant any fuel price adjustment.The mixture of over and under-recoveries per product on the BFP import parity landed in Walvis Bay calculated as at 25 July 2017 are indicated below:
95 Octane Unleaded Petrol – 11.911 c/l
Diesel 500ppm – (0.457) c/l
Diesel 50ppm – (3.379) c/l
Fuel pump prices in Walvis Bay will remain as:
95 Octane Unleaded Petrol – N$10.50 per litre
Diesel 500ppm – 10.33 per litre
Diesel 50ppm – 10.38 per litre
Fuel pump prices country-wide will also remain unchanged.