MINES and energy minister Tom Alweendo yesterday announced that fuel prices are set to increase by 50 cents for 95 Octane petrol and 70 cents for diesel tomorrow.
This is roughly the eigth fuel increase this year since May. Due to these increases, 95 octane unleaded petrol will now cost N$13,95 per litre, diesel 500ppm sold at N$14,48 per litre, and diesel 50ppm will cost N$14,53 per litre.
In a statement, Alweendo said the increases are due to the fact that the cost of importing fuel into the country in September was not fully passed on to the consumers.
"The provisional under-recoveries per product on the BFP import parity which landed at Walvis Bay calculated as at 25 October 2018, are indicated as follows: 95 octane unleaded petrol at 64,001 cents per litre, diesel 500ppm at 112,541 cents per litre, and diesel 50ppm at 114,148 cents per litre.
"Additionally, bulk oil importers rely on the profit margin on the pump price in order to sustain their operations. After the assessment of the return they are getting on their investment, it was revealed that there is a shortfall of two cents per litre. It is for this reason that the ministry has decided to increase the industry margin by two cents per litre, effective from 7 November 2018," the minister said.
He noted that his ministry is aware that fuel prices have been increasing for the past few months, but the full impact of the increases have not been passed on to consumers. Over the past months, over N$470 million has been spent from the National Energy Fund to fund the fuel price increases.
"This is attributed mainly to two factors, namely the global price per barrel of refined oil, and the exchange rate between the Namibia dollar against the US dollar. There also remains a shortage of oil in the global market after Iran's supply was reduced by the sanctions imposed on it by the US. Whenever there is a shortage of supply in the market, prices of oil naturally go up, as they have been for the past several months," Alweendo said.