Service stations threaten to shut down

Owners claim selling fuel at loss
Owners of filling stations across the country want government to approve a higher pump price, or they will close shop.
Adam Hartman
Service station operators across the country threatened to close shop for seven days if government does not address the price the industry is "forced" to sell petrol for, which they claim is negatively affecting their profits.

The Fuel and Franchise Association of Namibia (Fafa) on Monday met with the mines and energy ministry to discuss the loss the industry is trading at due to increasing fuel prices, and the levies in between that are leading to a reduction in businesses' profits.

Representatives of Fafa apparently informed the industry that the 'strike' will start next week if government, which is the fuel price regulator, does not attend to their concerns.

Attempts to get hold of Fafa chairperson Hennie Kruger were unsuccessful, but retailers Erongo 24/7 spoke to said the exercise is aimed to force government to realise how important the sector is, and that it needs intervention to stay afloat.

"It is government that tells us for how much we can sell our fuel for, and therefore they need to address it. Every time when the fuel prices increase, the profit margin decreases. We are trading at a loss," one operator said.

There have been several audio messages circulating on social media warning the public to fill up their vehicles because of the possible strike. Some claim that while petrol is delivered to Walvis Bay at about N$8 per litre, pump prices stand at N$22 a litre, and only about 5% of that is profit permissible to traders.

"Where does all the other costs come from and go to - from N$8 to N$22?" a person asked in one of the recordings.

Another retailer said they are being "strangled" by government's regulation, and that is why they are now "fighting back".

The Namibian consumer's price for fuel is based, amongst other things, on the basic fuel price (the price fuel is landed for in Namibia through Walvis Bay); a Southern African Customs Union levy; fuel tax; a road users' levy, and a fuel levy.

Don’t panic

When approached for comment, Petroleum Commissioner Maggy Shino said "there is no need for panic".

According to her, the ministry and Fafa had a meeting and agreed on a position going forward.

She explained that the issue is that because there has been no dealer margin increases, retail businesses have been experiencing economic difficulties, hence Fafa requested for an increase.

"Government's position is that under the current economic circumstances whereby the fuel prices have been increasing in the past few months, the current conditions cannot permit government to increase any margins," she said.

It was therefore agreed for the situation to be reconsidered when fuel prices stabilise.

When a relief in prices is achieved, a margin increase will be considered, she said.

Dealers are not confident of the agreement, however, as they find themselves in a predicament with “no sight of any relief soon”.

"We may still have to close shop to put pressure on government. They need to feel the effect. We don't want to hurt the consumer, but we need to put pressure on a government that wants to have a say in our business," a retailer said.

‘Can’t say no’

Erongo 24/7 understands Fafa represents a majority of the industry. Other sources within the industry said that not all members of Fafa are in agreement with the planned action, and it is doubted whether such action would bear fruit.

One source said they cannot afford to close shop, especially considering that they are situated along a major corridor that sees a lot of traffic - including trucks - to and from the north.

"If they come stop here, I cannot say no. And even if I say no, there will be another fuel station that will take my customers," the source said, adding that consumers can be assured that even if the strike does take place, there will still be fuel available elssewhere.

National Petroleum Corporation of Namibia (Namcor) spokesperson Utaara Hoveka declined to comment, but indicated that Namcor would not participate in such action.