Fuel increase puts strain on fishing companies
The Ministry of Mines and Energy announced yet another increase in petrol and diesel prices on Wednesday 16 May, for the fourth time this year.The sudden increase in fuel on Wednesday night will not only negatively affect inland transportation but offshore fishing companies will suffer setbacks as well.
Marine fuel, commonly known as bunker fuel, is bought in bulk by fishing companies and transported through ships from South Africa to the Jetty on the coast of Walvis Bay. An estimated 50 million litres of fuel and about 30 million litres of marine fuel is discharged into tanks at Walvis Bay.
Although marine fuel is ultimately cheaper to buy because it comes in bulk, fishing companies none the less will feel the fuel increment pinch because of costs endured through transportation and levies placed on the fuel.
A typical fishing company spends between 30 and 40% of its total revenue on fuel and fishing companies such as Tunacor Fishing based in Walvis Bay, say that the increase will negatively affect the business in the long run.
Peya Hitula, Tunacor’s general manager, said that the increment in fuel is sudden and puts strain on the company.
“Diesel impacts direct cash flow and this could have external consequences for any fishing company. As you know, prices of products do not increase with every fuel increase so this means that in turn, the revenue also doesn’t increase so we are forced to face the consequences which comes with the fuel increase,” Hitula said.
Brent oil prices have risen with over 13% during this year and is trading at above US$130 in the Middle-East and countries along the Mediterranean, from which Namibia inports its crude oil. According to the Minister of Mines and Energy, Isak Katali, these skyrocketing prices threaten a nascent recovery of the global economy.
“The situation in the global oil market remains the same and the cost of bringing oil to our shore is quite high, hence the recorded under-recoveries for the month of April,” Katali said.
A long-overdue comprehensive Dealer Margin Survey for the 2010/2011 financial year, recently revealed hat dealers in the local oil market were operating at a loss and therefore there was a need to adjust their margin by 5.657c/l on all controlled petroleum products.
The current Walvis Bay pump prices are considered to be low, therefore an adjustment was inevitable.With an increase of 33c/l, 93 Octane leaded replacement petrol now sells at a retail price of N$10.30 per litre, whilst 95 Octane unleaded petrol sells at a retail price of N$ 10.40 with an increase of 39c/l. Diesel wholesale price will now be N$10.48 after being increased by 13c/l.