Fluctuating international oil prices during July have resulted in local fuel pump prices remaining unchanged for August. This means that at the entry port of Walvis Bay, petrol will stay at N$13.55 c/l and the diesel price will remain at N$13.58 c/l.
“For the ministry to continue to soften the burden on the consumers and at the same time ensure the sustainability of the National Energy Fund (NEF), the ministry has decided to keep the fuel pump prices for August 2021 unchanged,” read a statement from the mines and energy ministry.
They noted that the average price of refined petrol increased from US$80 in June to US$85 in July, whilst the average price of refined diesel increased slightly from US$78 in June to US$79 in July. This, the ministry stated, was due to an increase in demand recorded in the first weeks of July in major markets such as the Americas, Middle East and North Africa (MENA) as well as some parts of Europe.
“Looking forward, oil prices look volatile as rising Covid-19 cases are posing a threat to oil demand recovery at a time when OPEC+ has announced to boost output with an extra 400 000 barrels per day from August through December. Still, forecasts indicate that demand is likely to overtake supply for the rest of the year”.
Domestically, the Namibia Dollar depreciated slightly against the US Dollar, from an average of N$13.93 in June to an average of N$14.40 in July 2021.
Owing to these factors during July, under-recoveries were recorded on the downstream side. An under-recovery of just over 91 cents per litre was recorded on petrol, while 50ppm diesel recorded an under-recovery of slightly more than 66 cents per litre. The ministry stated that the NEF will absorb the full under-recoveries recorded between the two regulated products.