Cabinet has approved the extension of the temporary reduction of fuel levies, with the exception of the Fuel Tax, until such a time that fuel prices start to significantly fall back to affordable levels.
The levies that will continue to be reduced by 50% are for the National Petroleum Corporation of Namibia (NAMCOR), Motor Vehicle Accident Fund (MVA) and Road Fund Administration (RFA).
At the meeting on 9 August Cabinet also approved the discontinuation of the temporary reduction of the fuel levy by 45 cents on all products and took note of the various long-term fuel procurement strategies being explored to mitigate the situation and stabilise fuel prices in the country.
Earlier this year, Cabinet approved the mines and energy ministry’s recommendation to temporarily reduce fuel levies for three months (May to July 2022) by 50%. Fuel levies and taxes make up 34% to 45% of the cost of Namibian fuel per litre.
Specific levies imposed on Namibian petrol and diesel prices include; a customs and excise duty for the SACU Revenue Pool; National Energy Fund Fuel Levy (comprised of the fuel equalisation levy, Namcor levy and National Oil Storage Facility levy), road user charges, which go to the RFA for road maintenance; fuel tax, which is collected by the finance ministry for the State Revenue Fund as well as the MVA Fund levy used to finance the activities of MVA, such as providing financial assistance to road accident victims.
Levies that were initially reduced include the road user charges (from 148 to 74 cents per litre), the fuel levy (from 90 to 45 cents per litre), the NAMCOR levy (from 7.6 to 3.8 cents per litre) and the MVA levy by 25% (from 50.3 to 37.725 cents per litre).