The Ministry of Mines and Energy has announced that fuel prices will be reduced by 120 cents and 60 cents for petrol and diesel respectively, effective Wednesday, 07 September 2022.
The announcement was made by Minister of Mines and Energy Tom Alweendo in Windhoek on Monday.
Alweendo also said the temporary reduction of Road User Charges, the Motor Vehicle Fund Levy and the Namcor Levy remain in force until further notice.
“After carefully assessing various factors affecting the fuel prices, namely the exchange rate and possible return of sanctioned of Iranian oil exports and the high over recoveries recorded by the ministry, we have thus reduced the prices of fuel to N.dollars 21.08 for petrol and N.dollars 22.12 for diesel in Walvis Bay,” the minister said.
This reduction, he noted, was necessitated by a decrease in fuel prices on the international front from August prices of petrol, from USD 128 per barrel to USD 111 per barrel in September, and for diesel from USD 140 to USD 135 for the same previous month.
He said the Namibian dollar/United States of America dollar exchange rate also played a significant role as the local currency has appreciated.
Alweendo added that the Namibian dollar/USD exchange rate contributed to Namibia experiencing an over recovery from the previous fuel prices.
“There was an over recovery of N.dollars 3 on petrol and N.dollar 1 on diesel, and usually if you have such a scenario, you can pass on the price decrease to the consumer. But we also use the over recovery to build the NEF (National Energy Fund), which cushions the price fluctuations,” he explained.
The NEF is sometimes used when there is under recovery to cushion against a high fuel price increase.
Alweendo said the industry wholesaler margins were also increased by 20 cents, the first such increase since 2019.
“Last month we gave 50 cents for the dealers. The levies will remain as is while we are watching how the industry is performing. It looks as if there is a bit of stability in the market as evidenced by the reduction of crude oil prices from USD 116 to USD 93 in the past six months,” he said, adding that they hope this decrease comes to about USD 50 to USD 60.
This would then filter to ordinary consumers and make basic goods and services prices affordable, Alweendo said.