By Petronella Sibeene
WINDHOEK
For the first time this year, the pump price of fuel will reach the N$7 mark for a litre. This follows an announcement yesterday by the Minister of Mines and Energy Erkki Nghimtina of an increase of 27 cents for petrol and 32 cents for diesel per unit.
The revised fuel price structure takes effect on Monday at 00h01.
The Motor Vehicle Accident (MVA) levy will also go up from 2 cents per litre to 20 cents per litre.
Although the pump price will go up on Monday, the Namibia Taxi and Bus Association (NABTA) will not revise taxi and bus fares.
The president of the association Magnus Nangombe said yesterday that taxi and bus fares would remain the same.
Nangombe said the industry was facing what he termed a “price war” and until that was resolved, no adjustments would be made to the fares in the public transport industry.
He said early this year the association introduced new taxi and bus fares but there were certain operators in the industry who were under-charging and that had brought confusion among operators and customers.
Nangombe attributed the under-charging by operators to the saturation in the industry where the number of operators surpassed demand.
“We are faced with a price war. For example, some people are charging N$90 to the North but the agreed fare between NABTA and government is N$115. This is not in line with the agreed price,” he said.
He said public transport users should not pay anything that was not approved and announced by NABTA.
In a statement, Nghimtina said the Walvis Bay pump price for 93 Octane Lead Replacement Petrol will now be N$6,89 per litre, while 95 Octane Unleaded Petrol will cost N$6,91. A litre of diesel will go for N$6,70.
In the capital, the price for 93 Octane Lead Replacement Petrol will be N$7,07 while 95 Octane Unleaded Petrol will cost N$7,09 and diesel N$6,89.
Nghimtina attributed the revised fuel price to surging crude oil prices that range between US$78 and US$80 per barrel.
“This situation of surging crude oil prices has rendered the crude markets to remain more tight and bullish, making it more difficult for non-oil producing countries and their economies,” he said.
In Namibia, the minister added, the situation has led to the import parity being negatively affected. This has further resulted in under-recoveries in the local market leading to the pump price increase.
The increase in petroleum products is driven by strong oil demand growth globally. Increased speculation in the future of the market and the loss of the Nigerian production of crude oil have also contributed to surging prices in vulnerable crude oil markets.
“These factors are impacting on the import parity in a way that higher margins of under/over recoveries are being recorded in our local market,” he said.
Nghimtina said the under/over recoveries experienced at the end of June this year, though not extremely high, are affecting the cumulative slate balance negatively and if fuel prices are not increased to accommodate related increased costs, the situation may spiral out of control.
Head of the Economics Department at the University of Namibia, Dr Omu Kakujaha, said the effects of a high fuel pump price and the general inflation rate in the country would be felt by all Namibians.
The situation, he added, might negatively affect some sectors and some employers might resort to retrenching, resulting in labour unrest.
“The problem is, the fuel price increase affects other industries. Milk already is about N$10 and in other areas it costs almost N$12. The high fuel price has passed on inflation,” he said.