WINDHOEK – Despite a petrol price increase of 96 cents a litre and a diesel price increase of 74 cents a litre that will come into effect in neighbouring South Africa on Wednesday, Namibia seems to have weathered the storm as the Ministry of Mines and Energy announced last week that for March petrol and diesel prices here will remain unchanged. Namibians will still be paying N$9.59 per litre for petrol, N$9.82 for diesel 500ppm and N$9.92 for diesel 50ppm.
While the South African government said the main reason for their fuel price increases was the average increase in the price of crude oil, the Namibian Minister of Mines and Energy, Isak Katali, said a significant fluctuation in the price of crude oil was not observed during the course of February. The price of crude oil hovered around the US$60 per barrel mark for the period under review. “However, the exchange rate for the month under review was quite high at an average of N$11.5745 per US dollar. Since oil is traded in US dollars on international markets, a high exchange rate means low demand for US dollars and thus low demand for oil,” said Katali in a statement released last week.
Katali added that even though oil markets remain oversupplied, the production of oil has been gradually moving to full capacity while demand for oil has remained more or less constant since around the middle of last year. “This explains why the oil price per barrel did not move up or down by values of any significance,” noted Katali.
The minister continued that in light of the present situation, Namibian oil traders will continue to import oil commodities at a relatively low price in the foreseeable future given that the Organisation of Petroleum Exporting Countries (OPEC) does not suddenly decide to cut its current production level as this will have an immediate upward effect on the price of oil. “Furthermore, the relatively low oil price will continue to stimulate growth across the whole economic spectrum throughout the country,” remarked Katali.
Meanwhile, South Africans said another reason for their hefty increase is the depreciation of the rand against the US dollar. However, that country’s energy department said it believed the price of crude oil would stabilise around the current level and no major price shocks were expected in the near future.