The petrol price will go up by 70 cents per litre, while both grades of diesel will increase by 40 cents a litre this Thursday. This means the price at port of import will be N$23 per litre for petrol, N$22.17 per litre for diesel 50ppm and N$22.37 per litre for diesel 10ppm.
The energy ministry has cited an upward trend global crude oil prices driven by persistent supply-side disruptions on refineries that contribute to market uncertainty. The ministry made the decision following the review of the fuel prices for May 2024.
As a fuel hike marginally but automatically drives up transportation costs, this is usually passed on to consumers through an increase in the price of goods and services. As a consequence, this is translated as an inflationary uptick.
"Global crude oil prices maintained their upward trend throughout March and April 2024, driven by increased geopolitical tensions in Eastern Europe and the Middle East. Notably, the supply-side disruptions on refineries in several parts of the globe continue to persist and contribute to market uncertainty, thus edging up oil prices globally. This is further reinforced by the OPEC-driven voluntary production cuts since the onset of the second quarter of 2024, exerting further upward pressure on oil prices," reads a ministerial statement.
The ministry's latest assessment indicates the average price of Unleaded Petrol 95 in April 2024 stood at US$108.983 per barrel, up from US$103.631 per barrel at the end of March 2024, indicating an increase of US$5.352 per barrel, or 5.2% during May 2024.
Moreover, the average price of Diesel 50ppm in April 2024 stood at US$103.536 per barrel, compared to US$100.512 per barrel at the end of March 2024, which was an increase of US$3.024 per barrel or 3%. The average price of Diesel 10ppm in April 2024 was at US$104.459 per barrel, up some 2.7% compared to May.
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The currency exchange rate for April 2024 showed a moderate appreciation of the Namibia dollar against the greenback, coming in at an average of N$18.86 per US$, compared to N$18.8603 per US$ at the end of March 2024.
The minister pointed out that this currency gain was not sufficient to outweigh the observed aggregate increase in global oil prices.
In addition, the ministry noted under-recoveries on both petrol and diesel products, amounting to 123.567 cents per litre on petrol, 60.214 cents per litre on diesel 50ppm and 51.208 cents per litre on diesel 10ppm.
The minister extended the temporary relief margin of 20 cents per litre offered to the oil importers for another six months or until such time the relief margin is reviewed, or the Petroleum Import Coordination System is implemented, whichever occurs first.
"The ministry would like to emphasise that Namibia is subject to international oil market prices, with limited headroom to avoid the impact of these developments. However, the ministry will continue to work prudently towards ensuring that the security of fuel supply is maintained, and the capacity of the National Energy Fund is optimised to stabilise fuel prices in a sustainable manner," they stated.
