Fuel prices to go up next month
The Ministry of Mines and Energy announced that fuel pump prices will increase on 1 November at midnight.
The fuel pump prices will be adjusted countrywide as follows; 95 Octane Unleaded Petrol (N$11.20 per litre), Diesel 500ppm (N$11.23 per litre) while Diesel 50ppm will be adjusted to N$11.28 per litre.
The ministry said that the results of the latest fuel price review indicate that the average Free On Board prices per barrel remained stable for ULP 95 and for both Diesel grades. Barrel prices for refined oil traded at an average of US$ 68.239 for ULP95, US$ 68.379 and US$ 68.800 for Diesel 500ppm and Diesel 50ppm respectively.
He added that Basic Fuel Price Unit Rate Slate calculations for the past month recorded under-recoveries on all the price regulated petroleum products. The under-recoveries recorded are sufficient enough to trigger an increase in local pump prices.
“The average exchange rate moved up from N$13.1485 to about N$ 13.5553 per US$ over the period reviewed. The depreciation of the Namibia Dollar against the US Dollar coupled with the fact that there was no upward adjustment for October 2017 prices despite the under-recovery situation back then contributed to the higher under-recoveries recorded during the current period,” Energy Minister, Obeth Kandjoze said.
Furthermore, Kandjoze said, the OPEC-non-OPEC producing countries’ Joint Ministerial Monitoring Committee (JMMC) has said based on the report of its Joint Technical Committee (JTC) for September 2017 that OPEC and participating non-OPEC producing countries have achieved a record high conformity level with the voluntary production adjustments, reaching 120%.
“The JMMC noted that while some participating producing countries have consistently performed beyond their voluntary production adjustments, others are yet to achieve 100 per cent conformity,” he added.
Meanwhile, the latest Petroleum Activities Return (PAR) report indicates that oil companies are failing to generate sufficient returns on their investments in the petroleum sector and there is a need to adjust their margins to a level that would encourage sustainability and further investment.
“The Ministry has, therefore, decided to increase the Industry Margin by 7 c/l from 84 c/l to 91 c/l on all the price regulated fuel products. The effective date for this adjustment is the 1st of November 2017,” Kandjoze stated.