Price of petrol to drop with N$1

The Ministry of Mines and Energy announced that the price of petrol will decrease by 100 cents per litre and that the price of of diesel will remain unchanged. The new price for fuel in Walvis Bay will thus become N$ 20.08 per litre for petrol and will remain at N$ 22.12 per litre for diesel.

These adjustments will become effective at 00:01 on 5 October 2022 and fuel prices across the rest of the country will be adjusted accordingly.

The latest calculations by the ministry indicate that the average price for Unleaded Petrol 95 over the period of 01-23 September 2022 is at USD98.794 per barrel (compared to USD110.334 per barrel at the end of August 2022), a huge decrease of about USD12 over the review period. Additionally, the average price for Diesel 50ppm over the period of 01-23 September 2022 is at USD133.675 per barrel (compared to USD136.360 per barrel at the end of August 2022), a much lower decrease of about USD3 per barrel over the review.

Furthermore, the exchange rate figures for the period of 1 to 23 September 2022 indicate that the NAD has depreciated against the USD at N$17.4573 per USD (compared to N$16.6985 per USD al the end of August 2022). This currency depreciation has a negative effect on the import parity price calculations and the local pump prices of fuel.

After entering these input factors into the fuel pricing model, the ministry recorded a combination of a high over-recovery on petrol and a low under-recovery on diesel, namely an over-recovery of 234 cents per liter on petrol and an under-recovery of about 33 cents per liter on diesel. In addition, the ministry has also resolved to reinstate the road user charges and the MVA levy back to their original levels while the NAMCOR levy will remain at its current level until further notice.

The ministry also said that it recognises that the situation in the international oil market is steadily improving for the better, although geopolitical instability and market volatilities might continue to have an unwanted impact on local fuel prices. "Oil prices continued to fall throughout the month of September 2022. The current prices signify the lowest level since January 2022 amid rising fears that a looming economic downturn will hurt global demand in energy markets. The price of US benchmark West Texas Intermediate is now trading at about $79 per barrel, reaching its lowest point since January 2022 amid mounting recession fears. Meanwhile, the price of international benchmark Brent crude is trading at about $87 per barrel. However, oil prices may still rebound since global supply could be further limited in the long-term as sanctions on Russian energy frighten amid the ongoing conflict in Eastern Europe."