Fuel price to increase with 70 c/l in December 2021
26 November 2021 | Energy
According to Simon, the ministry found itself at a crossroad during the review period and after exhausting all avenues and for the sake of keeping the NEF balance healthy, resolved to adjust the fuel prices for for petrol and diesel by 70 c/l effective from 1 December 2021.
The petrol pump prices in Walvis Bay (port of entry) will thus become N$15.65 c/l and that of diesel N$ 15.58 c/l. Fuel prices countrywide are expected to be adjusted accordingly and members of the public are encouraged to report any breach of this order, to the ministry of Mines and Energy.
Simon explained that after a series of OPEC meeting, members have still not agreed to increase supply to the market owing to prospects of surging Covid-19 cases which will supress demand.
“As a result, global oil prices remain high, although they fell slightly during the period under review. The price of refined petrol remains high, trading at an average of U$94 in November whereas diesel traded at an average of U$92.”
He added that the local currency depreciated slightly against the US Dollar from an average of N$14.85 in October to an average of N% 13.35 in the period under review. “Since fuel pump prices increased only minimally in November, in comparison to under-recoveries recorded the depreciation pushed up the under-recoveries brought forward from the previous month. An under-recovery of 110.063 cents per litre was recorded on UPL-95 petrol while 50-ppm diesel recorded an under-recovery of 106.902 cents per litre during the month of November. These under-recoveries will be paid by the National Energy Fund. Additionally, government through the National Energy Fund (NEF), fuel equalization mechanism will pay over N$154 million of under-recoveries recorded last month."
Simon said that the fuel price review process is one that requires a great understanding of forecasting since government cannot be too certain on how the market could perform in future. Government holds the position to ensure that an undue burden is not extended onto the Fund in order to safeguard its long-term sustainability and intend to end the year on a positive note and start 2022 on a positive note.”