Fuel price unchanged

Fuel retails will receive an extra couple of cents in the pocket, after the ministry of mines also increased the Dealer Margin by 50 cents per litre from 113 cents per litre to 163 cents per litre.
The ministry of mines and energy has announced that the fuel price for August 2022 will stay as is.

The price of petrol is N$22.28 cents per litre and the diesel price is N$22.77 cents per litre in Walvis Bay. Fuel prices across the rest of the country will also remain unchanged.

The issue involving fuel retailers was also addressed by the ministry with the Dealer Margin being increased by 50 cents per litre from 113 cents per litre to 163 cents per litre.

These changes will become effective from 3 August 2022.

The public relations officer of the ministry Andreas Simon stated that since mid-June 2022, international crude oil prices have fallen by nearly 20% amid rising fears that the aggressive interest rate hikes implemented by many central banks, including the Federal Reserve, could lead to a recession in major developed economies. “Despite that, tough issues related to the energy transition and geopolitical uncertainty will yet continue to linger over the oil market into the future. However, at the present time, the oil prices are at least falling due to the need to address the high fears of a global economic recession.”

He explained that the latest calculations by the ministry indicate that the average price for Unleaded Petrol 95 over the period of 1-22 July 2022 is at $130.463 per barrel (compared to $159.267 per barrel at the end of June 2022), a huge decrease of about $29 over the review period.

Additionally, the average price for Diesel 50ppm over the period of 01-22 July 2022 is at $141.547 per barrel (compared to $170.252 per barrel at the end of June 2022), another significant decrease of about $29 per barrel over the review period.

Simon said that the exchange rate figures for the period of 01-22 July 2022 indicate that the Namibian dollar has depreciated against the US dollar at N$16.8832 per USD (compared to N$15.8245 at the end of June 2022). "This currency depreciation usually has a negative effect on the import parity price calculations and the local pump prices of fuel, however this time around, it is outweighed by the significant decreases in the barrel prices.”

He explained that taking into consideration these factors in the fuel pricing model, the ministry recorded high over-recoveries on the two respective products; an over-recovery of 174 cents per litre on petrol and an over-recovery of 117 cents per litre on diesel. “These over-recoveries are mainly recorded due a significant decrease in the oil prices per barrel.”

The ministry also resolved to extend the temporary reduction of the levies imposed on fuel except for the fuel tax that will be reinstated back to 90 cents per litre on all products. This entails that the MVA levy, road user charge levy and the NAMCOR levy will remain at their current levels until further notice. "The ministry took the decisions aimed at creating stability within the oil market to ensure the security of fuel supply in the country," Simon concluded.