Windhoek — Namibian motorists and consumers should brace themselves for yet another fuel increase. Both leaded and unleaded fuel will increase by 19 cents per litre and diesel will increase by 26 cents per litre, at exactly one minute past midnight tomorrow.
According to the Ministry of Mines and Energy, oil demand is growing faster than the current oil supply, thereby driving up fuel prices.
"With the explosion of development in almost every part of the globe, maintaining equilibrium in the global oil market is a very difficult mission given the total number of oil reserves in the world at the moment.
"Demand is growing at a faster pace than our collective efforts to contain it. Expanding our manufacturing bases, constructing roads and bridges, boosting our agricultural production and fuelling our vehicles require burning more oil than is produced," explained the Minister of Mines and Energy, Isak Katali, in a statement released yesterday.
The Minister says the increase was necessitated by stagnant high oil prices, which are defying traders' expectations.
"Oil markets seem to have defied logic in the second half of 2012 and it is evident from recent fluctuations in crude oil prices.
Despite an over-supplied global market and a slow global growth, which inevitably leads to a significant fall in demand, crude oil prices are stagnant at a relatively high level, thereby defying the expectations of traders," said Katali.
The month of September witnessed prices per barrel of US$127 for petrol and US$134 for diesel in Singapore, Italy and the Arab Gulf from where Namibia imports its petroleum products.
Said Katali: "Compared to the previous month these prices are low, but not low enough to suffice substantial over-recoveries in the local market, hence the local market still suffered relatively high under-recoveries at the end of September." Katali added that the ministry strives to keep pump prices at the lowest possible level through subsidies and emphasised that half of the under-recoveries for September will have to be paid by the National Energy Fund.