WINDHOEK – Despite the continuation of increases in fuel prices, the latest of which came into effect on Wednesday last week, Namibia’s fuel prices remain below prices in neighbouring countries such as South Africa, Zambia and Zimbabwe.
While the latest fuel increase of 25 cents per litre was caused by the increase in the fuel tax by the same amount, as announced by Minister of Finance, Calle Schlettwein, in his budget statement on 7 March 2018, the fuel tax increase actually became effective on 4 July 2018, but was only passed on to the consumer with the most recent pump price increase. Still, this was the third consecutive fuel price increase for petrol and the fourth for diesel even though prices were kept relatively stable between December 2017 and May and April 2018.
This means that petrol prices for Windhoek have increased by 7.9 percent and diesel (50ppm) prices by 10.3 percent since the beginning of the year. Compared to August 2017, petrol and diesel prices are 14.6 percent and 24.7 percent higher and exceed the previous peaks in June 2014, when petrol cost N$12.51 per litre and diesel N$13.15 per litre. In between, prices dropped as low as N$9.81 per litre for petrol in March 2015 and N$9.80 per litre for diesel in May 2016. Petrol now costs N$12.97 per litre and diesel N$13.36 per litre in Windhoek. According to Klaus Schade, a Research Associate at the Economic Association of Namibia, prices in a market economy indicate the degree of scarcity of goods and services. Therefore, he says, price fluctuations are expected to result in a change of consumption behaviour.
“Higher prices for fuel, if lasting longer periods of time, should therefore lead to the use of more fuel-efficient equipment, more efficient use of transport equipment (car-pooling, better trip planning), a shift to non-motorised modes of transport for shorter distances (walking, cycling) and eventually the move to other forms of ‘fuel’ than oil products. Electric vehicles and vehicles running on hydrogen are on the rise globally. Some countries have already set deadlines for the phasing out of combustion engines by the year 2040. Namibia has the chance to be the first major mover on the African continent to support a major shift to e-vehicles including e-scooter, ebikes, etc. that are well suited for relatively short daily trips in urban areas. They can be re-charged during working hours, lunch breaks or at home during the night. Namibia is endowed with renewable energy sources to recharge the batteries. Since the country is also endowed with lithium, it should be explored whether it is viable to produce lithium-ion batteries that power e-vehicles,” said Schade in a statement commenting on the latest fuel increase.
He added that the continuous subsidisation of fuel could delay necessary adjustments in transport behaviour. He suggested that government rather consider to use the National Energy Fund (NEF) to fund investment necessary to support the shift to e-vehicles and or hydrogen, such as recharging stations at public places.
“Furthermore, since the Act stipulates that the Fund can be used for research, more resources should be made available for research into more sustainable forms of transport and transport equipment, such as the e-taxi developed by the Namibia University of Science and Technology. Hence, rising fuel prices provide the opportunity to chart the way forward for an environmentally friendly and sustainable transport sector. Not least, this will support Namibia’s efforts to achieve the Agenda 2030 – the Sustainable Development Goals, in particular SDG 13 that aims at combatting climate change,” Schade commented.
Namibia’s fuel pump price is to a large extent determined by the international oil price including transportation, insurance and unloading at Walvis Bay. These costs combined account for about 61 percent of the pump price in Walvis Bay. Additional charges and fees add to the total pump price. The road user charge adds another 10 percent, the NEF fuel levy, like the dealers’ margin, is about 8 percent, industry margin 7 percent, fuel tax about 5 percent and MVA levy about 4 percent. Transportation costs that were adjusted last month add to the pump prices at other destinations New Era Reporter
2018-08-06 10:10:08 | 2 years ago