Windhoek — Fuel prices decreased just past midnight today. Mines and Energy Minister Obeth Kandjoze attributes the decrease to the global oil supply growth that continues to take a toll on oil prices, despite several meetings held by the world's biggest oil cartel, the Organisation of Petroleum Exporting Countries (OPEC), to arrest the situation.
95 octane unleaded petrol decreased by 50 cents a litre, while all grades of diesel decreased by 30 cents a litre.
"To date there appears to be no signs in sight for sharp increases in the crude oil prices in the months ahead. Refined oil prices picked up slightly during the course of February to an average of US$44 for gasoline (petrol) and US$38 for gasoil (diesel)," said Kandjoze in a statement released on Monday.
Kandjoze continued that although oil prices are low globally, local motorists have not enjoyed the full benefits in the form of low fuel pump prices due to a sudden increase in the exchange rate of the Namibia dollar against the US dollar.
"As we might all know, oil is traded in US dollar, and an appreciation in the US dollar meant that local oil importers had to pay more in terms of the local currency to bring oil to our shores. The average US$/NAD exchange rate for the period under review was N$15.82, slightly higher than the previous months," Kandjoze noted.
He also pointed out that the latest Petroleum Activities Return (PAR) report shows that oil companies are not getting enough returns on their investment in the petroleum sector and there is a great need to adjust their margins to a level that would encourage further investment in the sector.
The ministry has, therefore, decided to grant an 8 c/l increase on the industry margin. An additional increase of 0.68 c/l is equally granted on the service differential for the maintenance of oil storage facilities (depots) and fuel handling costs incurred by oil companies. The effective date for these adjustments is today, March 02.