Namibia: Northern Fuel Dealers Want Levies Waived

Fuel dealers based in northern Namibia are demanding that the Ministry of Mines and Energy waive all fuel levies and taxes, including duties, until the rampant fuel smuggling in the north has stopped.

They say they are not generating any income due to cheaper fuel sold by smugglers.

Currently fuel dealers are charged a levy of 90c on fuel, a Road Fund Administration levy of N$1,36, a Motor Vehicle Accident Fund levy of 47c, and a National Energy Fund levy of 98c.

Fuel dealers believe these levies contribute to the high fuel prices motor vehicle owners are charged.

Illegal fuel smuggling is lucrative in especially the Ohangwena and Omusati regions.

Joshuwa Mwetupunga, a local fuel dealer in the Omusati region who says he speaks on behalf of fuel dealers in the northern regions, says it has become difficult for them to compete with illegal fuel smugglers.

Vehicle owners no longer fill up their vehicles at petrol stations, but buy from fuel smugglers, he says.

"If all these levies are waived, this would bring the total price per litre for petrol to N$10,023, which would be much more competitive with the Angolan prices," Mwetupunga says.

"We need the government to stop fuel smuggling as of today," he says. "It looks like the police are not doing anything to assist us in this regard."

Mwetupunga says fuel dealers are demanding to be compensated with at least 80c per litre for the losses suffered as a result of illegal fuel smuggling.

"We further demand an additional 50c per litre on top of the current dealer margin of N$1,10 to support entrepreneurs who are mostly site owners who have borrowed money to fund capital costs.

"The cost of investing in a service station is way too high compared to the profit margins. Operational and non-operational costs such as electricity, wages, insurance and general maintenance of fuel stations are also way too high," he says.

Mwetupunga says fuel dealers further demand that the ministry check the fuel gauge of every vehicle entering and leaving Angola. No vehicle should be allowed to cross the border without a functioning fuel gauge, he says.

Minister of mines and energy Tom Alweendo says illegal fuel smuggling in the north is a serious commercial crime.

"The government has put up a number of fuel levies so that the government is able to fund capital projects, and when people are buying stolen fuel, those levies are not collected. So it's not only the fuel dealers who are suffering, but the government as well.

"We are concerned about the rising incidence of fuel smuggling in the country, and we have to do something to stop it with immediate effect," he says.

Alweendo says the porous border is a major contributing factor to fuel smuggling.

He says fuel in Angola is cheaper than in Namibia, because the fuel there is not refined according to the Southern African Development Community's standards, and because no levies are added to Angolan fuel products.

"We have come up with a number of solutions, such as when you possess fuel, you must have something showing you bought it legally, but the law is currently not strong on that. If you are found with fuel in a container, you are the one to prove that you bought that fuel legally, and not the government. Another solution is for you to have a receipt when you purchase fuel, and we also need to look at the quantity one can possess," Alweendo says.

The minister further says the government must reassess current fines for fuel smuggling.

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