Sudden price stabilisation in international oil prices after almost five months of continuous increases has resulted in the mines and energy ministry keeping Namibian fuel prices unchanged for the month of May. This means fuel pump prices in Walvis Bay will remain at N$13.15 per litre for petrol and N$13.18 per litre for diesel, while prices across the rest of the country will also remain unchanged at their current respective levels.
“The international oil market has been hit by fears of a slowdown in oil demand after India, the world’s third-largest oil importer after China and the United States, imposed restrictions as coronavirus infections and deaths surged to record highs. Japan, the world’s fourth-biggest oil importer, is also expected to announce a wave of lockdowns due to Covid-19. Fears of a decline in the demand for oil across Asia are, however, counteracted by the decline in Libya’s oil production due to internal problems. These developments have a direct impact on the global demand and supply equation for oil, and the markets have reacted accordingly,” explained ministry spokesperson Andreas Simon via a media statement.
Simon said the exchange rate has seen an appreciation of the Namibia Dollar against the greenback at roughly N$14.4 per US dollar during the month of March 2021 versus the average exchange rate for March 2021 of N$14.9. This currency appreciation also contributed to the final price stabilisation that manifested during April.
Meanwhile, the per barrel prices of petrol across the international product market decreased slightly from US$73.64 to US$73.63, while diesel decreased from about US$68.55 to US$66.89 during April.
Simon explained that based on these reasons, the current review has shown a sudden stabilisation in especially the barrel prices of oil, which is very different from the volatile prices recorded over the last few months.
Moreover, the current review has an under-recovery of 38 cents on petrol, and an over-recovery of 14 cents on diesel. As these values are relatively low, the ministry resolved to keep fuel pump prices for May 2021 unchanged.
Said Simon: “The international oil market is a very volatile environment, and oil prices can swing in any direction at any given moment. The ministry will, however, continue to monitor the global oil market developments and take the best possible decisions to safeguard the interests of Namibian fuel consumers”.