Africa-Press – Namibia. THE Ministry of Mines and Energy announced a 30% increase in Dealer Margins for fuel retailers which will increase by 50 cents, going from 113 cents per litre to 163 cents per litre, effective from 3 August.
This increase comes after fuel station owners threatened to go on a strike earlier this month, as they could not cover the rising costs.
While Dealer Margins increase, the ministry said that fuel prices remain unchanged. The pump price for Walvis Bay will remain N$22,28 per litre for petrol and N$22,77 per litre for diesel. Fuel prices will also remain unchanged across the rest of the country.
The ministry said that this decision was taken to create stability within the oil market to ensure the security of fuel supply in the country. This decision was also influenced by the significant decrease in the oil barrel prices as international crude oil prices fell by nearly 20% since mid-June.
The ministry said that its latest calculations indicate that the average price for Unleaded Petrol 95 over the period of 1 to 22 July is at USD130,463 per barrel, which is a huge decrease of about USD29 and the average price for Diesel 50ppm also decreased by about USD29 per barrel over the review period.
“Since mid-June 2022, international crude oil prices have fallen by nearly 20% amid rising fears that the aggressive interest rate hikes implemented by many central banks, including the Federal Reserve, could lead to a recession in major developed economies. Despite that, tough issues related to the energy transition and geopolitical uncertainty will yet continue to linger over the oil market into the future. However, at the present time the oil prices are at least falling due to the need to address the high fears of a global economic recession,” the ministry said.
The ministry added that the exchange rate figures for 1 to 22 July indicates that the Namibian Dollar (NAD) depreciated against the US Dollar (USD) at N$16,8832 per UUSD. This currency depreciation, the ministry said, usually has a negative effect on the import parity price calculations and the local pump price of fuel, but this time the effects are outweighed by the significant decrease in the barrel prices.
“Therefore, after entering the above input factors into the fuel pricing model, the Ministry recorded high over—recoveries on the two respective products, namely an over-recovery of 174 cents per litre on petrol and an over—recovery of 117 cents per litre on diesel. These over—recoveries are mainly recorded due a significant decrease in the oil prices per barrel,” the ministry explained.
The ministry also decided to extend the temporary reduction of the levies imposed on fuel except the fuel tax that will be reinstated back to 90 cents per litre on all products. The ministry explained that this means that the Motor Vehicle Accident Fund (MVA) levy, the road user charge levy and the National Petroleum Corporation of Namibia (NAMCOR) levy will remain at their current levels until further notice.
File photo for illustrative purposes only.
For More News And Analysis About Namibia Follow Africa-Press
