By Petronella Sibeene WINDHOEK Even if the local fuel market recorded an over-recovery of about 38 cents per litre following the decrease in the international crude oil price, fuel prices in the country will remain unchanged, says the Ministry of Mines and Energy. Minister of Mines and Energy, Erkki Nghimtina, last week announced that the international crude oil price had retreated from the record high in August of almost US$80 per barrel to below US$69 per barrel. Given this downward trend, the local market is said to have recorded an over-recovery of 38.456 c/l for 95 Octane unleaded petrol, 38.984 c/l for 93 Octane lead replacement and 12.188 c/l for diesel. Although there is recovery in the local market coupled with the decrease in international crude oil prices, the minister says there is the constraint of a huge backlog of under-recoveries experienced in the past month. As such, there is a risk of this backlog deteriorating further if corrective measures are not taken accordingly. “These factors compelled the Ministry of Mines and Energy to keep fuel pump prices unchanged for this month in order to subsidize the persisting backlog of the cumulative slate balances for the months of May, June and July 2006,” Nghimtina said. He said it was worth noting that the current global oil spare capacity is prone to natural disasters, especially hurricanes in the United States of America, and to developments in Iran, Nigeria and Venezuela. There is no certainty that fuel prices will remain stable given potential geopolitical threats in these states that might push up the fuel prices again or above the current US$69 a barrel. “It is apparent that crude oil prices will remain volatile and any little imbalance can result in large swings in crude prices. At present, the Ministry of Mines and Energy will keep fuel prices at current levels despite the over-recovery realized in the local market, ” Nghimtina says. On 18 August 2006, the ministry announced its last increase. Retail price for lead replacement petrol (LRP), unleaded petrol (ULP) and the wholesale price for diesel were all raised by 50 cents. At Katima Mulilo and Rundu, motorists started paying N$6.66 for a litre of LRP (93) and ULP (95) while N$6.68 a litre is paid for diesel. In the northern towns such as Oshakati, LRP (93) now costs N$6.67 while diesel sells for N$6.73 per litre. In the capital vehicle owners pay N$6.59/litre for LRP (93), and N$6.61 for ULP (95) while diesel costs N$6.68. At Walvis Bay, the prices of the same are N$6.44, N$6.42 and N$6.50 per litre respectively while at Noordoewer in the far south, LRP (93) costs N$6.80/litre, ULP (93) N$6.82/litre and diesel N$6.88. Namibia imports most of her fuel from South Africa. Earlier, the Governor of the South African Reserve Bank, Tito Mboweni, during the 86th ordinary general meeting in South Africa, stated that he had noted the increase of oil to almost US$80 per barrel in the past weeks but considering a stable Rand and international product price basket, it would translate into an oil price reduction of roughly 37 cents. During the same week Nghimtina commented in an interview with New Era that the then speculated drop in fuel price would mean good news for the Namibian consumer though at the same time he cautioned that reduced fuel prices locally would largely depend on the time and at what cost Namibia would purchase fuel from its main supplier, South Africa. Last Wednesday, fuel prices on the South African market dropped by 36 cents per litre, but still being a difference of 1 percent higher (unleaded petrol) compared to Namibia. LRP and diesel show a difference of 2.4 percent and 6.4 percent higher in Namibia than in South Africa. This means that ULP (95) in Namibia costs N$6.61 while in South Africa the same product costs R6.68. In the same way, LRP (93) in Namibia is purchased at N$6.59 and R6.43 in South Africa. Diesel sells at NR6.68 in Namibia and R6.25 in South Africa. “It should be emphasised that although the ministry endeavours to keep fuel prices to the bare minimum as it has such a huge impact on the economy of the country, it will harmonize fuel prices with neigbouring states to be fair in respect of the pricing mechanisms used,” Nghimtina said.