The government has launched a review of storage fees at the country’s strategic fuel depot to open the sector to more Namibian entrepreneurs and improve access to critical fuel infrastructure.
The review is being undertaken by the Ministry of Industries, Mines and Energy in partnership with the National Petroleum Corporation of Namibia (Namcor).
Officials say the exercise is designed to establish market-related tariffs for the National Oil Storage Facility (NOSF) while ensuring a fair and transparent system for companies seeking to store fuel products. Speaking during an exclusive interview with New Era, the acting terminal manager at the facility Victoria Nepembe said the review is still ongoing and that the government will provide detailed feedback only once the process is complete.
“The NOSF fees that were initially charged here were below market-related fees that are charged in the industry. So, the government is reviewing these fees. Once they are complete, that’s when we will give feedback indicating the cost on the basis of the volumes that entrepreneurs would want to store and how much it will cost them, what exactly they are required to pay and for what exact services they are paying for,” Nepembe stated.
The state-of-the-art storage facility is a crucial part of Namibia’s fuel security infrastructure, designed to hold strategic reserves and serve as a central hub for fuel imports and distribution.
However, officials acknowledge that access to the facility has so far been limited, with only one local company, Validus Energy, having used its storage capacity.
“Their contract actually came to an end, and then it was extended for six months. That is the only company so far that has been hosted,” she said.
Despite this limited utilisation, the facility has recently received a surge in interest from local businesses, seeking to store different petroleum products.
Nepembe said multiple applications have been submitted by companies hoping to import and store diesel, unleaded petrol (ULP) and aviation fuel.
“Some are looking for space to bring in diesel and have it stored here. Some are looking for space to bring in ULP and have it stored here. Others are looking for space to bring in Jet A1 and have it stored here,” she said. One example, she noted, involves a company that currently transports Jet A1 aviation fuel by road from neighbouring South Africa, an arrangement that significantly increases costs.
“They bring in Jet A1 via road from South Africa. That is uneconomical, given how much they are spending. So, they are trying to bring it in via our facility by bringing in a vessel. We would store it here, and then they load it onto trucks here and supply the different airports for which they have contracts,” Nepembe stated.
Such arrangements, if facilitated through the NOSF, could dramatically reduce logistics costs while strengthening Namibia’s domestic fuel supply chain.
However, increased demand for the facility also raises questions about available capacity.
Nepembe cautioned that space limitations could become a challenge if more companies simultaneously begin utilising the facility.
“The only thing now that we might be challenged with is the capacity that we have available,” she said.
To address this potential bottleneck and prevent the facility from being monopolised by a few players, NOSF and Namcor management are exploring new operational strategies aimed at broadening access.One of these strategies involves limiting storage agreements to short-term contracts rather than long-term arrangements that could tie up valuable tank space.
Nepembe said contracts of about 30 days are considered the maximum guideline, although companies may also request shorter storage periods, depending on their operational needs.
“One option is that you would probably just want storage for five days because you ended up finding a customer where you want products to be delivered immediately,” she said.
The operational approach is intended to create a more dynamic and competitive storage environment, ensuring multiple businesses can access the facility throughout the year.
“We are trying to level the playing field so that each and every business has an equal opportunity,” Nepembe stressed.
She added: “Once you give one business a long-term contract, then it blocks out other businesses”.
Meanwhile, industry observers commented that the fee review and proposed contract model could significantly reshape Namibia’s downstream petroleum sector by lowering entry barriers for smaller local operators.
By allowing more companies to import and store fuel products, the NOSF could help stimulate competition in the fuel market, potentially improving supply reliability and pricing dynamics.
At the same time, the move aligns with the government’s broader policy objective of promoting greater participation by Namibian entrepreneurs in strategic sectors of the economy.
Once the fee review is completed, authorities are expected to outline the final pricing structure, storage conditions and operational guidelines governing access to the NOSF going forward.
For many local fuel traders waiting on the sidelines, the outcome could determine whether Namibia’s flagship oil storage facility becomes a true gateway for domestic participation in the domestic energy supply chain.