Fuel pump prices countrywide will remain unchanged for the month of May as international oil production has remained relatively stable over the past two months as major oil producers, under the auspices of the Organisation of Petroleum Exporting Countries (OPEC), continue to manoeuvre and deliberate on the best ways possible to return the market to the desired price levels for hydrocarbons.
According to a statement issued yesterday by Minister of Mines and Energy, Obeth Kandjoze, the latest fuel price review indicates that the average FOB prices per barrel increased slightly by US$3 for ULP 95, and US$2 and US$1 for diesel 500ppm and diesel 50ppm respectively. The BFP Unit Rate Slate calculations for the past month recorded under-recoveries on all the regulated petroleum products.
“The government has set up a fund (National Energy Fund) whose mandate, amongst others, is fuel price equalisation. Fuel price equalisation is a mechanism that ensures that sharp and transient spikes in global oil prices will not have a significant effect on our transportation network, which would consequently lead to an increase in prices of goods and services, from the food on our tables to flight tickets.
“The under-recoveries recorded are sufficient to trigger an increase in local pump prices. However, the National Energy Fund will have to absorb these under-recoveries by compensating fuel importers to spare motorists high pump prices countrywide,” Kandjoze explained.
He further noted that the average exchange rate over the past month dropped by 80 cents from N$15.5 to N$14.7 per US$, which contributed to a positive effect on minimising the under-recoveries recorded for the period under review.