Petrol, diesel prices rise againThe Ministry of Mines and Energy announced that the price of petrol will increase by 50 cents per litre and that of diesel by 70 cents per litre, effective on Wednesday 3 November 2021.
This means that fuel pump prices in Walvis Bay will become N$14.95 per litre for petrol and N$14.88 for diesel. The prices across the rest of the country will be adjusted accordingly.
Senior ministerial public relations officer Andreas Simon said that the National Energy Fund will cover the entirety of the under-recoveries recorded (amounting to approximately over N$20 million) for October on behalf of fuel consumers through the fuel equalization levy. The ministry said that in the currency exchange market, the N$ recorded a slight depreciation against the USD at roughly N$14.8136 per US$ during October compared to the average exchange rate for September 2021 at N$14.5826 per US$.
A local currency depreciation usually has a negative effect of increasing the under-recovery level, decreasing the over-recovery level in the final Basic Fuel Price (BFP) calculations. The latest calculations therefore indicate an under-recovery of 132 cents on petrol and an under-recovery of 154 cents on diesel. As a result the ministry needs to ensure a fuel price that is reflective of market movements to ensure the security of the fuel supply to the country. Moreover, the ministry said that Namibia is a price-taker in the international oil market. “The country does not have crude oil resources or refineries through which it can hedge against oil price volatilities, apart from the National Energy Fund fuel equalization mechanism.” Furthermore, “government is only in direct control of domestic levies, taxes, and margins on the price of fuel compared to price makers such as the Organisation of Petroleum Exporting Countries (OPEC) and other major oil producers such as the Russian Federation which influence the prices of petroleum products.”