Namibian petrol prices for June 2023 will remain unchanged while the price of diesel 50 ppm will decrease by 80 cents per litre and that of diesel 10 ppm will drop by 60 cents per litre.
The petrol prices in Walvis Bay will thus remain N$19.78 per litre while diesel 50 ppm will cost N$19.05 per litre and diesel 10 ppm N$19.25 per litre.
According to the mines and energy ministry, the prices of oil are experiencing significant short-term declines due to ongoing demand concerns caused mainly by the rampant strengthening of the United States dollar.
"It is further anticipated that the oil price will continue to fall as OPEC is not expected to cut its overall output further in its next meeting on 04 June 2023. Although the Russian Federation does not expect any new major developments from OPEC+ at its upcoming meeting on 4 June, Saudi Arabia has hinted at the possibility of another round of production cuts to try pushing up oil prices.
However, oil prices could rebound if OPEC+ was to introduce significant production cuts, coupled with a more resilient-than-expected US economy, unless demand elsewhere absolutely collapses (akin to Covid-like lockdown), or the market is hit with non-compliance from big OPEC+ producers," the ministry stated.
The latest calculations by the ministry indicate the average price for unleaded petrol 95 over May 2023 was US$92.1 per barrel, compared to US$102.4 per barrel at the end of April 2023, depicting a significant decrease of about US$10 over the review period.
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Additionally, the average price for diesel 50ppm over May 2023 was US$85.8 per barrel, compared to US$96.5 per barrel at the end of April 2023. Moreover, the average price for diesel 10ppm over May 2023 stood at US$87.3 per barrel, compared to US$97.4 per barrel at the end of April 2023).
Furthermore, the exchange rate figures for 01 to 26 May 2023 indicate the Namibia dollar has depreciated against the US dollar to N$18.9 compared to N$18.2 at the end of April 2023.
Therefore, after entering these input factors into the fuel pricing model, the ministry recorded over-recoveries on petrol and both diesel products. Overall, an over-recovery of 4 cents per litre was recorded on petrol and over-recoveries of 136 and 118 cents per litre on diesel 50ppm and 10ppm, respectively.
The mines and energy ministry has also received a request from the finance and public enterprises to increase road user charges included in the prices of petrol and diesel. To this end, a resolution was taken to increase the road user charges for road maintenance and construction of new roads by 30 cents per litre from 148 cents per litre to 178 cents per litre effective 07 June 2023.
A ministry official explained that although the road user charges are increasing by 30 cents per litre, an equal adjustment has been made in the opposite direction to keep fuel prices unchanged.
The effective date for all these adjustments is Wednesday, 7 June 2023, at 00h01.
The ministry expressed hope that the market will continue to be favourable, especially for net fuel importing countries like Namibia, which could result in consumers paying less for fuel products at the pumps.
