Collapsing crude prices bring welcome relief to motorists and consumers
Both diesel and petrol are set to come down by N$1 per litre as of Wednesday 06 May 2020. The new Walvis Bay price of 95 octane unleaded petrol will be N$10.35 per litre and the diesel 50ppm price will be N$11.13 per litre.
Announcing the substantial decline in fuel prices, the Minister of Mines and Energy, Hon Tom Alweenda said although the price of crude in American markets has essentially collapsed, the benchmark price for Namibia, Brent Crude, also experienced a sharp fall, moving from US$35 per barrel for petrol and US$43 for diesel in March. This was followed by a respective US$22 and US$29 decrease in April.
The effect was however offset to a certain degree by the depreciation of the South African Rand but over-recoveries to the fuel egalisation fund of N$2.02 per litre for petrol and N$1.80 per litre for diesel were still recorded. This allowed the ministry space to increase the wholesale margin for distributors as well as the retail margin for service station owners while bringing the overall price down.
The latest Petroleum Activities Report which determines the annual return on investment for bulk oil importers indicate that companies are currently recouping less on their investment. For that reason the wholesale margin increases by 7 cents per litre. Similarly, to support service station owners during a period of subdued sales, the retail margin has been increased by 50 cents per litre but only for the period May, June and July.