After holding their breath for government to save their pockets from sky-high local fuel prices, motorists received a bit of relief.
The anticipation from consumers kicked in after Namibia announced the largest fuel increase ever in her history last month, coupled with significant increases in inflation.
After consultations with the finance ministry and other State institutions, cabinet approved the mines and energy ministry’s recommendation to temporarily reduce levies for three months (May to July 2022) by 50%.
Levies that were reduced include the road user charges (from 148 to 74 cents per litre), the fuel levy (from 90 to 45 cents per litre), the NAMCOR levy (from 7.6 to 3.8 cents per litre) and the MVA levy by 25% (from 50.3 to 37.725 cents per litre).
“The approved reduction in the levies amounts to 135.375 cents per litre on each of the two products and based on the monthly fuel consumption level of about 89 million litres. The reduction of the levies amounts to about N$120.4 million per month in savings to the fuel consumer at the macroeconomic level,” said the energy minister Tom Alweendo last week during a media briefing.
He noted the forthcoming reduction of the levies also entails that the over-recovery on petrol of 31 cents per litre and the under-recovery on diesel of 92 cents per litre are each supported by a surplus of 135.375 cents per litre on each product.
Making the latest decrease known, Alweendo said the ministry will continue to keep a close eye on the developments in the global oil market and make decisions that are in the best interest of the Namibian fuel consumer.
This he said after stating that petrol prices will decrease by 120 cents per litre and the diesel prices will decrease by 30 cents per litre with effect from Thursday, 5 May.
This will bring Walvis Bay petrol prices to N$17.90 per litre and diesel at N$19.93 per litre.
Furthermore, during the briefing, Alweendo observed the two main factors that continue to affect fuel prices globally.
He said the global oil market continues to face many uncertainties in the coming months.
The latest calculations from the ministry indicate the average price for unleaded petrol 95 over the period 1 to 25 April 2022 is US$125.034 per barrel (compared to US$129.370 per barrel at the end of March 2022.
Additionally, the average price for diesel 50ppm over the same period is US$148.788 per barrel (compared to US$145.681 at the end of March 2022), a moderate increase.
Even before the Ukraine crisis broke out, diesel fuel was already in short supply due to a drop in global refining capacity.
He explained: “It is mainly this shortage, coupled with the ongoing geopolitical tensions, that has kept diesel prices at record levels to this date. In addition, shipping costs are also on the upward trajectory following the bans imposed on the fleets of the Russian Federation”.
Also, the exchange rate for the period under review indicated the Namibian dollar recorded another slight appreciation against the US$ at N$14.8382 per USD.
This appreciation, Alweendo said, is not very significant to the bottom line.
“Our recent review, therefore, recorded a combination of over and under-recoveries during the trading cycle under review – that is an over-recovery of 31 cents per litre on petrol and an under-recovery of 92 cents per litre on diesel,” he stated.
The minister continued the National Energy Fund (NEF) will cover the entirety of the under-recoveries recorded between 1 to 30 April 2022 approximately to N$51.5 million on behalf of fuel consumers. - mndjavera@nepc.com.na