By Petronella Sibeene WINDHOEK Taxi fares are expected to go up next week following recent fuel increases announced by the Mines and Energy Ministry last week. The last increase of 10 percent was made two years ago. As a result of the fuel price increase, observers in the industry say taxi fares are likely to go up. A reliable source disclosed to New Era yesterday that taxi fares would soon go up by 10 percent, bringing the minimum fare to about N$7. The Namibia Bus and Taxi Association (Nabta) will soon announce the fare increases following a request by local taxi drivers to increase the fares to enable them to cover the ever-rising price of fuel and other inputs such as tyres and spare parts. "We are busy and by next week we should announce the increments," said Nabta vice president, Innocent Simasiku. Long distance routes such as Windhoek to Katima Mulilo could also be affected. A passenger currently pays N$230 for a one-way trip from Katima Mulilo to Windhoek while fares for Oshakati to Windhoek stand at N$115. "We need to consult with and inform our regional offices before the final announcement is made," he said. Namibia has for the past two years seen several fuel price increases with taxi fares remaining at N$6.50 for short distances and double for destinations without a taxi rank. Simasiku added that stakeholders were still deliberating on the matter. Despite fuel prices rising for such a long time, Nabta has exercised patience hoping the situation would improve. The increase in fuel price and consequently taxi fares is being attributed to high international and market prices in the oil industry. Local Economist and chief executive officer of RMB Asset Management Namibia (PTY) LTD, Martin Mwinga, says oil price on international market is expected to remain above US$80. Oil analysts forecast a 17 percent increase in the average annual Brent crude oil price to around USD84/bbl this year. This is due to tightening conditions in the crude oil and refining sectors. Strong demand growth is anchored by robust economic growth in the emerging markets, while supply should be boosted by new global refining capacity from end of the year. He said oil prices are therefore expected to retreat to between US$70/bbl and US$80/bbl next year. Given the low level of the Ministry of Mines and Energy fund, the best option available to the Government is to increase fuel price. Even if oil prices decline this year, the Namibian dollar/rand is expected to depreciate gradually on a trade-weighted basis and more rapidly against the US dollar on the back of an anticipated recovery in the greenback. Although high interest rates in South Africa should continue to benefit the rand, latter in the year the rand should receive slightly less support from growth and interest rate differentials, especially once the SARB embarks on its anticipated easing cycle. Meanwhile, the current electricity shortages experienced in both Namibia and South Africa will force consumers to resort to substitutes like liquid fuels to replace electricity. The demand for liquid fuel will increase, an action likely to put upward pressure on fuel prices. "Unfortunately, Namibia and Africa are small players in the global economy and are price takers, so we have to live with the high oil price as dictated by global market forces. To make matters worse, electricity shortages, high interest rates, high inflation, all mean that tough times lie ahead for Namibians," Mwinga warned.
2008-02-19 00:00:00 10 years ago