Namibia should focus on strengthening its domestic fuel stocks to prepare for any eventuality in the face of persistently volatile international oil markets.
The mines and energy ministry last week emphasised the need to strengthen the domestic shock absorption capacity “at this point” as it continues to closely monitor oil market developments, while protecting Namibian consumers to every possible extent.
The ministry made these statements when it announced that domestic fuel prices would remain unchanged for August 2024.
“In spite of the relative increase in oil production over the month of July, particularly by the United States and other non-OPEC members, oil prices have edged up globally, owing to the prevailing geopolitical tensions and associated volatilities. However, a reduction has been observed in the shipping and freight costs for vessels that bring the oil into the country from the international oil markets,” the ministry noted.
Ministerial calculations indicate that the average price of Unleaded Petrol 95 over July 2024 stood at US$99.125 per barrel, compared to US$95.278 per barrel at the end of June 2024.
This indicates an increase of US$3.847 per barrel, or 4.04% over the review period.
Additionally, the average price of Diesel 50ppm over July 2024 stood at US$98.633 per barrel, compared to US$95.275 per barrel at the end of June 2024, signifying an increase of US$3.358 per barrel, or 3.52%.
Diesel 10ppm increased by US$3.328 per barrel ,or 3.48%.
Meanwhile, from 1 to 22 July 2024, the Namibia Dollar appreciated just over 1% against the United States Dollar.
“Having considered all the input factors mentioned above into the fuel-pricing model, the ministry recorded an over-recovery of 18.268 cents per litre on petrol, and over-recoveries of 7.393 cents per litre on diesel 50ppm, and 13.258 cents per litre on diesel 10ppm. The over-recoveries are thanks to the combined effects of a stronger domestic currency and lower shipping costs. In this regard, and taking into account upside risks on global oil prices, the observed over-recoveries provide a window of opportunity to restore a healthy balance of the national slate account to boost our capacity to better absorb future market volatilities,” the ministry stated.