Fuel pump price for September decreased early this week, as 95 Octane Unleaded Petrol went down by 30 cents per litre retailer and all grades of diesel decreased by 40 cents per litre.
Therefore 95 Octane Unleaded Petrol started trading at N$10.69 per litre, Diesel 500ppm and Diesel 50ppm are now pegged at N$10.42 and N$10.52 per litre respectively.
“Although subsidized, Namibia fuel pump prices continue to increase month by month despite the fact that crude prices are falling,” according to the Ministry of Mines and Energy statement.
According to the release, the decrease is brought on by a contradiction; Brent crude is on a decreasing trend while the exchange rate between the South African Rand which is pegged to the Namibian dollar is sky rocketing against the US dollar.
“These conflicting developments have deprived consumers for months the full benefits of lower international crude oil prices as local companies still fell the pinch of unfavorable exchange rate as they make purchases to bring refined petroleum products to Namibian shores,” added the statement.
“It is, however, worthy to note that this time around substantial over-recoveries were recorded to trigger a decrease and give local motorist a relief. Supply and demand for oil that is said to longer be dictating the price but is instead the financial markets and more importantly money flows tied to central bank policy,” it noted.
“This can be observed by a session that saw prices fall as much as 6 % after a Chinese equities rout sent global markets into a tailspin. The Rand weakened to 3.3% to R13.41/US$, the most since September 2011, data compiled by Bloomberg shows. The exchange rate has a strong influence on the fuel pump prices in our country,” said the ministry.
Meanwhile, the National Energy Fund has since been requested by the technical committee on strategic projects to adjust its levy with 20c/l in order to strengthen its capacity to finance the strategic fuel storage facility. It is for this reason that the Ministry has decided to grant a 10 c/l increase on the NEF levy to fast tract the mobilisation of funds for that national project.