WINDHOEK – Due to significant under-recoveries per product on the basic fuel price (BFP), it is estimated that the National Energy Fund will avail in excess of N$40 million in subsidies to spare consumers the burden of a fuel increase for November.
This means that fuel prices will remain unchanged for November with Walvis Bay prices remaining at N$13.05 per litre for 95 octane unleaded petrol and N$13.63 per litre for diesel 50ppm.
According to a statement issued yesterday by the Ministry of Mines and Energy, the steep increase in the cost of landing refined oil at Walvis Bay resulted in the under-recoveries, meaning the actual cost of oil exceeded the pump price at Namibian service stations.
“Naturally, under-recoveries trigger a fuel price increase at the pumps locally. However, this time around the National Energy Fund will spare consumers the pinch at the pumps by subsidising the under-recoveries. It is estimated that the subsidy will be in excess of N$40 million,” read the statement from Mines and Energy Minister, Tom Alweendo.
Alweendo explained that the global oil market has been relatively stable throughout October 2019, in that there were no major events to trigger major fluctuations in the prices of refined oil. On average, prices came down compared to the preceding month. A barrel of refined petrol traded on average at US$72 per barrel throughout October 2019, while September recorded an average of US$73 for the same product.
Diesel traded on average at US$76 throughout October, whereas September recorded an average of US$77. Overall, there was a slight reduction in global oil prices in October compared to September, which is a good development for a net importer of oil like Namibia because it means low under-recoveries for the month.
Moreover, there were no significant fluctuations in the exchange rate between the Namibia Dollar against the US Dollar throughout the month of October. The Namibia Dollar slightly depreciated, on average from N$14.80 in September 2019 to N$14.90 in the period under review, but this depreciation has not however led to adverse results in the provisional BFP figures.
2019-11-05 08:27:11 | 17 days ago