The Ministry of Mines and Energy announced earlier this week that both diesel fuel pump prices decreased on Wednesday, 6 January 2016, while petrol prices are to remain unchanged.
The pump prices for Walvis Bay will change as follows; 95 Octane Unleaded Petrol will be N$10.54 per litre. Diesel 500ppm at N$9.72 per litre and Diesel 50ppm at N$9.77 per litres.
According to the ministry, Petrol pump prices will remain unchanged and diesel pump prices at various inland destinations countrywide will be adjusted accordingly.
The ministry in their announcement noted that by the start of 2015, the price of crude was falling fast and has continued its general down trend through today currently at roughly US$36.75 per barrel. Although being a challenge for oil producing exporting nations, it has brought some relief to consumers of the importing nations such as Namibia as it resulted in acceptable over-recoveries leading to fuel pump prices to decrease.
Oil fell to the lowest level in more than six years on 21 December 2015, amid speculation that suppliers from the Middle East to the U.S. will exacerbate a glut as they fight for market share. 30 December 2015 saw Crude oil falling around half a dollar early on Wednesday as the market remained under pressure from slowing demand and high supplies, while forecasts that a cold snap in Europe and the United States would be short-lived also hurt prices.
The 2016 period has been characterized as better for lower prices. Many traders are closing their last long positions for the year today as nobody wants to come back in January and be surprised badly.
Iran, which expects sanctions over its nuclear program to be lifted by the first week of January, has secured customers for its planned supply expansion, with plans to add 500,000 barrels a day of exports within a week of the removal of sanctions and 1 million within six months, said the country’s deputy oil minister.
However, OPEC does not see oil prices returning to triple-digit territory within the next 25 years, a strikingly bearish conclusion. The group expects oil prices to rise by an average of about US$5 per year over the course of this decade, only reaching US$80 per barrel in 2020. From there, it sees oil prices rising slowly, hitting US$95 per barrel in 2040.
Meanwhile, oil trading is conducted with the US dollar around international markets from which Namibian companies import refined hydrocarbons. Still the Namibian dollar remains relatively weak against the US dollar. The average exchange rate stands at Namibian dollar 14.7915 per USD compared to NAD14.0187 per USD for the preceding period.