OIL markets which have "defied logic" in the second part of 2012 have forced Mines and Energy Minister Isak Katali to push up petrol prices by 19 cents a litre and diesel prices by 26 cents a litre from tomorrow.
The latest increase will drive up the pump price of of 95 Octane Unleaded Petrol in Walvis Bay to N$10,27 a litre, while 93 Octane Lead Replacement Petrol will cost N$10,15 a litre. Diesel will sell for N$10,64 per litre in the harbour town.
Included in the price hike is an increase of three cents a litre in the dealers' margin - the third one since May. The higher dealers' margin follows a comprehensive dealer margin survey for the financial year 2010-11, which showed that dealers in the local oil market were operating at a loss of 5,657 cents a litre.
With the latest adjustment, the dealer margin will have increased by nine cents a litre.
Katali said the higher dealer margin will help the industry to upgrade its assets to international standards, comply with safety regulations and ensure that they conduct their business in an environmentally conscious way.
Confirming the new fuel price in a statement yesterday, Katali said although Namibia paid less for petrol and diesel in September than the previous month, the prices weren't "low enough to suffice substantial over-recoveries in the local market". As a result, the National Energy Fund still suffered "relatively high" under-recoveries at the end of last month, he said.
Consumers will have to carry half of these under-recoveries, Katali said.