Clemencia Jacobs
30 October 2009
Windhoek — Namibia's fuel prices are subject to factors such as demand and supply, crude oil prices, the exchange rate and geo-political tensions in the world.
According to Anna Libana, manager of the National Energy Fund (NEF), it is therefore difficult to predict whether the fuel price will increase or decrease over the next few months.
"The Namibian Units Slate Rate calculation for end of October will determine whether the fuel price will decrease or increase due to what transpires in the market. During October, the crude oil price is ranging from above N$60 to N$70 per barrel," said Libana.
Namibia imports 50% of its fuel from the United States, the Middle East and Europe, while the rest is imported from South African refineries.
The country has one fuel price country wide, namely the Walvis Bay pump price.
But inland prices are determined by the cost of delivering the product by rail to the 11 inland depot towns from Walvis Bay and the cost of road delivery from the depot towns to other destinations, which may vary from 5 cents to 16 cents per kilometre.
"The NEF helps to pay the slate under-recovery to the suppliers of petroleum products and also receive the slate over-recovery from the suppliers of petroleum products. The slate under-recovery is a situation when the international crude oil price is higher than the national fuel pump price whereas the slate over-recovery is when the international crude oil price is lower than that of the national fuel pump price. When the slate over-recovery occurs, the suppliers of petroleum products pays the over-recovery balance to the NEF, while the fund pays the slate under-recovery to the suppliers of petroleum products," explained Libana.
A price cut of 33 cents a litre for petrol and 23 cents for a litre of diesel took effect this month. The price-cuts were due to a strengthened average exchange rate, a decline in international crude oil prices and OPEC's decision to maintain existing production targets.
International crude oil prices dropped from US$75 to below US$60 per barrel during September. Leaded petrol at Walvis Bay currently costs N$6.71, while diesel costs N$6.70.
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