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Fuel prices to go up for second consecutive month – March prices up by 80 cents

Fuel prices to go up for second consecutive month – March prices up by 80 cents

The price of petrol and diesel will go up by 80 cents on midnight of 03 March, the Ministry of Mines and Energy said. This will be the second consecutive increase, after fuel prices went up by 50 cents in February.

The new fuel prices will become N$ 12.65 per litre for petrol and N$ 12.68 per litre for diesel. Andreas Simon, spokesperson of the ministry said they are cognisant of the fact that the increases in the local prices of fuel will put more inflationary pressures on the prices of goods and services in the economy.

“However, due to the major dynamics of demand and supply in the international oil market at the present time, demand-side oil price regulators will have to continue making these hard and painful decisions,” Simon said.

According to the ministry the current review has an under-recovery of about 109 cents on petrol and about 111 cents on diesel, indicating that the current pump prices are not reflective of the actual prices in the market.

“The ongoing international roll-out of COVID-19 vaccines and the subsequent reopening of the global economy has major effects on the international oil market. As the global economy continues to reopen, the demand for oil is expected to continue outweighing oil supplies from OPEC and other major oil producers, causing international oil prices to continue increasing quicker and sharper than previously expected,” Simon said.

Simon added that if global oil stocks continue to remain steady over the coming months, refined oil prices will probably hit USD 68 per barrel as early as next month and even go to as high as USD 72 per barrel in the next three months.

Although the exchange rate has seen an appreciation of the Namibian Dollar against the USD at roughly N$14.7494 per USD during the course of February 2021, the continuous and significant increases in barrel prices have far more significant implications for the local oil consumers.

The per barrel prices of petrol across the international product market have increased from about USD 59.49 to about USD 66.31 while those of diesel increased from about USD 58.98 to about
65.80 during the current review.


About The Author

Donald Matthys

Donald Matthys has been part of the media fraternity since 2015. He has been working at the Namibia Economist for the past three years mainly covering business, tourism and agriculture. Donald occasionally refers to himself as a theatre maker and has staged two theatre plays so far. Follow him on twitter at @zuleitmatthys

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