The Ministry of Mines and Energy yesterday confirmed that fuel pump prices for November 2020 will remain unchanged countrywide. A ministerial statement from spokesperson Andreas Simon noted that even though minimal under and over-recoveries were recorded in the fuel retail industry, the ministry will strive to continue softening the burden on consumers and, at the same time, keep the fuel pump prices stable to ensure the sustainability of the National Energy Fund.
Andreas noted that, generally, a host of factors influence local fuel pump prices. However, the ministry based this latest decision on international prices of refined petroleum products, the exchange rate between the Namibian Dollar against the US Dollar, and the cost of shipping petroleum products from international markets to Namibia’s shores.
During October 2020, international prices for refined petrol and diesel remained relatively stable. In fact, refined petrol slightly decreased from an average of US$47.21 in September to an average of US$46.75 in October whereas diesel slightly increased from an average US$42.70 in September to an average of US$43.83.
Furthermore, the exchange rate between the Namibia Dollar against the US Dollar remained relatively stable with a slight strengthening from an average of N$16.71 in September to an average of N$16.55 in
“This partly contributed to the reduction in the under-recovery recorded on petrol, from -9.264 c/l, last month to -1 .270 c/l this month. In addition, the diesel pump prices were reduced in October by 40 c/l while petrol prices remained unchanged. Consequently, the previous reduction in diesel pump prices caused an over-recovery, from 60.697 c/l in September to
1 1 .464 c/l in October 2020,” read the statement.
An under-recovery indicates that the pump prices were lower than the import price and an over-recovery indicates that the pump price was higher than the import price.
“In a normal circumstance, when an under-recovery occurs, it is passed onto the consumer or alternatively, it is financed from the National Energy Fund (NEF), in-order-to subsidise the consumer,” the statement reads.
Simon added that the objective of the monthly fuel prices review exercise is to ensure that fuel pump prices are at all times reflective of the import price and to do so in an orderly manner.