Relief for motorists as fuel prices drop, amid stabilising global environment
The Mines and Energy Minister, Tom Alweendo announced on Monday that petrol prices will decrease by N$1.20 per litre, while diesel will decrease by 65 cents as of Wednesday.
The new fuel prices will thus be N$21.08 per litre for petrol and N$22.12 per litre for diesel.
Alweendo said the possible return of sanctioned Iranian oil exports to global markets, coupled with the worries that the rising U.S. interest rates would continue to weaken fuel demand, have been some of the contributing factors to the falling prices of crude oil over the last few weeks.
“Should the negotiating parties reach consensus on an Iran Nuclear Deal, this will entail that more oil will start flowing into the market and possibly cause prices to fall over the near-term. However, the situation could prove problematic on the other side of the coin as falling U.S. crude and product stockpiles have already started to add to the upward pressure on prices, as well as the possibility that OPEC and its allies will cut production to support an increase in prices for the benefit of crude oil suppliers,” Alweendo said.
The ministry recorded high over-recoveries on the two respective products, namely an over-recovery of about 300 cents per litre on petrol and an over-recovery of about 100 cents per litre on diesel.
“These over-recoveries are mainly recorded due to a significant decrease in the oil prices per barrel,” Alweendo said.
Meanwhile, the ministry has resolved to continue with the extension of the temporary reduction of the road user charges, the MVA levy, and the NAMCOR levy until further notice.
The ministry has also resolved to increase the industry margin for fuel wholesalers by 20 cents per litre from 108 cents per litre to 128 cents per litre on all products effective on 07 September.