Fuel prices will drop by 50 cents a litre in Namibia at one-minute past midnight tomorrow, 5 July 2017. The pump prices at Walvis Bay will then be N$10,50 per litre for petrol and N$10,33 and N$10,38 respectively for 500ppm diesel and 50ppm diesel.
The major reason for this favourable drop in the fuel price is the fact that the prices for both crude and refined oil performed less than what was expected when OPEC members agreed to cut crude oil production in an attempt to spur a demand and thus higher market prices.
There were expectations that crude oil prices would have hovered above US$65 by June, but to the contrary June recorded crude oil prices of between US$57 and US$60 per barrel.
“For the past four months, the prices have not reached that threshold with June recording US$60 and US$57 for a barrel of refined diesel and petrol, respectively. These averages are not far from the preceding month’s averages of US$63 per barrel for refined diesel and US$60 for petrol”, reads the statements.
The exchange rate between the US Dollar and the Namibian Dollar also added to the positive situation with regard to the price drops, according to the Ministry of Mines and energy.
“The average exchange rate for June 2017 was N$12,88 compared to May’s average of N$13,22. This means that importing fuel to our shore was less costly in June comparing to the preceding month of May”, the Ministry states.
A further positive development which made fuel imports cheaper was the drop in the cost per ton of shipping by oil tanker. The rate dropped in June to US$145,70 per tonne as opposed to US$151,30 per ton in May, the Ministry explains in the statement.