Fuel prices go up by 50 cents in February
The Ministry of Mines and Energy announced that as of midnight 3 February, the price of petrol and diesel will increase by 50 cents per litre.
The new fuel prices will be N$11.85 per litre for petrol and N$ 11.88 per litre for diesel.
The month of January 2021 saw an under-recovery of about 102 cents on petrol and about 105 cents on diesel.
Spokesperson of the ministry, Andreas Simon said the last review also had under-recoveries, and although those were moderate in comparison to the current figures, the Ministry resolved at that time not to increase fuel prices considering that seasonal farming activities in most of the country were just kicking-off and a lot of travelling from various holiday destinations was taking place.
“The Ministry can, however, not afford to continue running under-recoveries indefinitely. Thus, a partial upwards adjustment in fuel pump prices is warranted to avoid passing on the full burden to consumers at the pumps,” Simon said.
The exchange rate has not been favourable during the course of January 2021 and the prices of petrol and diesel across the international product market have also gone up significantly, owing mainly to supply cuts by OPEC’s biggest producer.
The local currency traded at about N$15.09 per USD compared to about N$14.85 per USD throughout December 2020. From last month, the barrel price of petrol increased from roughly USD52.74 to about USD59.18 while that of diesel increased from about USD54.47 to about USD58.85 during January.
“Due to these reasons, the current review is indicating a need for an upwards adjustment in the local fuel pump prices,” Simon said.
The Ministry has further resolved to adjust the dealer margin on all products for the service station operators by 3 cents per litre from 110 cents per litre to 113 cents per litre, in line with the general inflation rate for 2020 of about 2.2%.
“Moving forward, the Ministry will closely monitor market developments in efforts to devise the best possible fuel pricing interventions,” Simon said.