Guest Contributor | Feb 22, 2024 | 0
April fuel prices to increase – Motorists to fork out an additional 50 cents
Due to major price instabilities in the international oil market which have not yet stabilized over the last three months, the price for petrol and diesel will go up by 50 cents at midnight on 7 April, the Ministry of Mines and Energy announced.
The new fuel prices will become N$13.15 per litre for petrol and 13.18 per litre for diesel. This will be the third consecutive increase since February. In March, fuel prices went up by 80 cents, after 50 cent increases in February.
The ministry said this year alone, the prices of oil have increased by more than 30% due to the steadfastness of OPEC and other major producers to keep oil production to a certain minimum.
The demand for oil is also consistently recovering with many economies that are optimistic about emerging from the coronavirus crisis.
“This projected economic growth will be accompanied by a huge demand for oil products, further pushing international oil prices upwards,” spokesperson of the ministry, Andreas Simon said.
The current review has recorded an under-recovery of about 117 cents on petrol and about 85 cents on diesel. These significant under-recoveries indicate that the current pump prices are still not reflective of the actual prices in the market.
Simon said the National Energy Fund will fund the under-recoveries recorded for the month of February 2021 to the tune of N$107.4 million. In addition, the Fund will also have to avail about N$90 million to finance the under-recoveries recorded for the month of March 2021.
“The Ministry is cognisant of the fact that the increases in the local prices of fuel will continue to put more inflationary pressures on the prices of goods and services in the economy. However, due to the major dynamics of demand and supply in the international oil market at the present time, demand-side oil price regulators will have to continue making these hard and painful decisions,” Simon said.
The exchange rate has seen a minor depreciation of the N$ against the USD at roughly N$14.9901 per USD during the month of March. The average exchange rate for February was N$14.7584 per USD.
It is, however, the persistent and significant increases in barrel prices that have a major impact on the local oil market. In March, the per barrel prices of petrol across the international product market have increased from about USD67.51 to about USD74.21 while those of diesel increased from about USD66.73 to about 69.95 during the current review.