• August 4th, 2020

Tax increase pushes up fuel prices once more

Front Page News
Front Page News

Edgar Brandt WINDHOEK – Fuel prices would as of August 1 shoot up once more countrywide, thanks to a new increase on fuel taxes, barely a month after the fuel prices went up drastically for those living in the northern inland areas. The new price increases were necessitated by the increase in tax on fuel, which the Ministry of Finance adjusted by 25 cents per litre, increasing the tax from 40 cents per litre to 65 cents per litre. Although the increase in fuel tax was introduced on July 4, the energy ministry says the increase was not passed on to consumers at the fuel pumps. From August onward motorists filling up their vehicles will feel a pinch in their pockets from the full effect of the entire 65 cents per litre one must pay in tax when they pay for fuel. “The local oil market operates on a cost-recovery model and the idea is that all supply costs are passed on to consumers at the pumps. The effective date for this adjustment at the pumps is August 01, 2018,” Minister of Mines and Energy, Tom Alweendo explained in his statement. The latest increase will see fuel pump prices in Walvis Bay increase to N$12.55 per litre for 95 octane unleaded petrol, N$12.88 per litre for diesel 500ppm and N$12.93 per litre for diesel 50ppm. Fuel prices already went up a whopping 60 cents a litre on June 6, 2018. In July the energy ministry increased fuel prices by a further 10 cents per litre for those living in the northern regions. As a result all towns that are supplied with fuel that has been transported by rail from Walvis Bay to Ondangwa are paying 20 cents more per litre for 95 unleaded petrol and 19 cents more per litre for diesel. The increases were partly a result of a reorganisation of TransNamib’s rail routes and fuel distribution points, which now have Ondangwa as the distribution point of fuel to other northern towns. Previously bulk fuel was transported per rail from Walvis Bay up to Tsumeb from where it was distributed to other towns further inland. The fuel price is a major factor in determining the price of basic goods and services and most of these are adversely affected because fuel went up again at one minute past midnight today, August 1. The fuel increase, which is the third in three months, is surely expected to trickle down to basic bread and butter issues, which will make living in Namibia even more expensive. But Alweendo yesterday reminded that despite these increases the National Energy Fund is still subsidising consumers, as it is absorbing the differences between the high prices being paid by oil importers to bring oil into the country and the lower prices that consumers pay for fuel. He said the results of the latest fuel price review indicate that oil importers paid more than the prices set by the government to bring fuel products into the country. The final figures recorded are way above the prices set by the government and these pricing under-recoveries are huge enough to trigger upward adjustments in the local pump prices in order to create cost-recovery equilibrium in the local market. “However, the under-recoveries will be wholly absorbed by the National Energy Fund (NEF) on behalf of consumers. Last month (June 2018) the NEF also financed the entire under-recovered amount on behalf of fuel consumers,” said Alweendo.
New Era Reporter
2018-08-01 09:16:11 | 2 years ago

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