Petrol prices will come down by a whopping N$1.70 per litre and diesel will decrease N$1.20 per litre on 1 April 2020 as global demand for the oil wanes in the face of the crippling impact of the Covid-19 outbreak.
The massive drop in local oil prices was announced even as the local currency depreciated against the United States greenback.
As of the beginning of April, the reduced petrol price at Walvis Bay will be N$11.35 per litre while diesel will be N$12.13 per litre.
In a statement sent out on Friday, Mines and Energy minister Tom Alweendo stated that refined oil has recorded significant price reductions in terms of the international product market. At the end of February 2020, one barrel of petrol traded at an average of about US$64, in comparison to an average of US$41 during March. In addition, a barrel of diesel traded at about US$47 during March compared to US$65 at the end of February 2020. “This dramatic drop of petrol prices is caused by the impact of Covid-19 on the global economy and the continuous high supply of oil products during a period of low demand,” Alweendo explained.
The minister further noted that on the international money market, the US dollar is still the main currency used for conducting foreign transactions and said it appears that there has been ample speculation resulting in an increased demand for the greenback.
“The financial speculations resulted in the depreciation of the Namibia dollar against the US dollar. On average, one US dollar exchanged for N$16.3 during March in comparison to an average N$15 per US dollar at the end of February 2020.
On the retail front, over-recoveries at service stations calculated per product on the basic fuel price were 192.9 cents per litre for petrol and 147.5 cents per litre for diesel. According to Alweendo ,these over-recoveries are very high and consequently necessitated the ministry to make these latest fuel pump price adjustments.
-ebrandt@nepc.com.na