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Collapsing crude prices bring welcome relief to motorists and consumers

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.


 

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About The Author

Daniel Steinmann

Educated at the University of Pretoria: BA(hons), BD. Postgraduate degrees in Philosophy and Divinity. Publisher and Editor of the Namibia Economist since Febreuary 1991. Daniel Steinmann has steered the Economist as editor for the past 31 years. The Economist started as a monthly free-sheet, then moved to a weekly paper edition (1996 to 2016), and on 01 December 2016 to a daily digital newspaper at www.economist.com.na. It is the first Namibian newspaper to go fully digital. He is an authority on macro-economics having established a sound record of budget analysis, strategic planning and assessing the impact of policy formulation. For eight years, he hosted a weekly talk-show on NBC Radio, explaining complex economic concepts to a lay audience in a relaxed, conversational manner. He was a founding member of the Editors' Forum of Namibia. Over the years, he has mentored hundreds of journalism students as interns and as young professional journalists. He regularly helps economics students, both graduate and post-graduate, to prepare for examinations and moderator reviews. He is the Namibian respondent for the World Economic Survey conducted every quarter for the Ifo Center for Business Cycle Analysis and Surveys at the University of Munich in Germany. Since October 2021, he conducts a weekly talkshow on Radio Energy, again for a lay audience. Send comments or enquiries to [email protected]

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