Petronella Sibeene
8 October 2008
Windhoek — Fuel prices are expected to drop again next week Friday.
The reduction in the prices of fuel comes barely a month after the Ministry of Mines and Energy announced another cut.
With the reduction in prices, a unit of 93 octane lead replacement petrol and 95 octane unleaded petrol will decrease by 50 cents a litre, while diesel will drop by a significant 95 cents a litre.
This will be the third consecutive month fuel prices have gone down.
The Minister of Mines and Energy, Erkki Nghimtina, last month announced a reduction in fuel price of 50 cents per litre for petrol and 80 cents for diesel.
Under the new price adjustments, in Windhoek where a litre of diesel costs N$10.50, it will now go for N$9.55, while 93 octane currently selling at N$9.13 will cost N$8.63 and octane N$8.65.
At Walvis Bay, diesel will cost N$8.84 from N$9.79 and 93 octane petrol will sell for N$7.92 while 95 octane will be sold at N$7.94.
An authoritative source disclosed to New Era yesterday that the fuel price adjustments will come into effect on October 15.
The source attributed the low crude oil prices as contributing factors to the price cuts. But it is unpredictable to say for how long crude oil prices will remain low.
Some analysts are predicting that crude oil prices will rise as high as US$250 per barrel given the financial crisis currently gripping the United States.
That would certainly not be good news for most consumers across the world and particularly in Namibia, where consumers have spent the greater part of the year digging deeper into their pockets.
The Ministry of Mines and Energy has always warned that crude oil prices will remain volatile and necessary caution and due diligence need to be exercised in reviewing fuel prices to avoid a negative effect on the country's economy.
Local economist and Chief Executive Officer of RMB Asset Management Namibia, Martin Mwinga, says fuel price decreases will enable consumers to save a few dollars that can be spent on servicing debts and buying food.
Similarly, Editor of Consumer News Magazine, Henry Pote, welcomed the move saying this is expected to bring to an end rising prices on other commodities where fuel prices have been used as an excuse.
He, however, added that the person on the ground might not immediately get the benefits as it takes months for retailers to pass on the benefits to consumers.
For almost a year, rising oil prices have taken a toll on Namibia's economy driving up fuel and food prices and in the process ripping a large hole in people's pockets.
But of late, oil prices have been dropping sharply from the triple digit peak reached in July to a double digit.
Should the trend continue, it will put a few badly needed dollars back into consumers' pockets.
Since last month, oil prices have fallen below US$90 a barrel on worries that the spreading financial crisis will exacerbate a global economic slowdown and cut demand of crude oil, the Associated Press (AP) reported yesterday.
Oil prices have tumbled nearly 40 percent since peaking in July this year.
The drop, according AP, came as world stock markets plunged amid growing investor anxiety of a global financial crisis triggered by bad debt mess in the United States.
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