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Energy Fund subsidises June fuel prices

The Ministry of Mines and Energy announced that pump prices of fuel will remain unchanged as a combination of the exchange rate and as the demand for oil declines in countries with enormous appetite for oil as the northern hemisphere summer approaches. Local import prices were relatively cheaper in May 2014 compared to the previous month. Substantial over-recoveries were recorded, being absorbed by the National Energy Fund this time strengthening its capacity to subsidize future price hikes or shocks. For this reason the Ministry has decided to keep fuel pump prices unchanged.

The local pricing model based on the average price per barrel in US dollars is the largest component. Expectations are that its decline as seen in May will lead to the local oil market pulling through in the month following the over-recovery. The ministry said the exchange rate to the US dollar remains in an appreciating trend. Walvis Bay pump prices will thus remain unchanged at N$12.29 per litre for 95 Octane Unleaded Petrol, N$12.82 per litre for Diesel 500ppm, and N$12.92 per litre for Diesel 50ppm. Furthermore, pump prices at various inland destinations will also remain unchanged, according to the ministry’s statement. The dealers margin is stands 81 cents to the litre, Customs & Excise Duty four cents, Namibia Energy Fund 53cents, road user charge N$1.04, fuel tax 12 cents and the Motor Vehicle Fund 49 cents.

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