A second fuel price decrease in two months was implemented on Wednesday when the petrol price dropped by 75 Namibian cents per litre and the diesel price fell by 50 cents per litre.

This means that the petrol price has come down by more than N$1 per litre since May, while diesel has become 62 cents cheaper per litre.

Mines and Energy Minister Isak Katali announced the good news for consumers last Friday adding that the price adjustment also includes an increase of two cents per litre for the Motor Vehicle Accident Fund (MVAF) levy, as well as five cents per litre increase for the National Energy Fund (NEF). 95 Octane Unleaded Petrol now costs N$9,40 a litre in Walvis Bay, while 93 Octane Lead Replacement Petrol is now N$9,28 a litre. Diesel in Walvis Bay sells for N$9.86 per litre wholesale.

Katali said the increase in the NEF levy will help finance a strategic fuel-storage facility, a national project to ensure the future security of oil supply. Katali further said the drop in the fuel price was due to the fact that global oil prices have declined drastically and is “the biggest in three years, owing to signs of slowing growth in countries with enormous appetite for oil, most notably China and the USA.” He also warned that Europe-Iran sanctions have been in effect since the beginning of the month, “a situation that would see a million barrels removed out of the market due to supply disruption. It is therefore expected that the prices of crude may increase sharply again in the months, ahead of a shortfall of oil,” he said.

In March this year petrol prices reached record highs facing instability in oil-producing regions and rising global oil prices that drove petrol prices higher than the record price recorded in July 2008.

Internationally China is now also set for its third fuel-price cut since May; China’s reduction was also instituted yesterday. In New Zealand petrol prices fell for the sixth time in June, the most consecutive price cuts since 2008. Similarly American retail diesel prices continued to fall this week as the US national average price of retail diesel fuel fell by 3 cents per gallon. American prices are at their lowest since February 21 last year, and are 20 cents below this time a year ago. Diesel dropped for a twelfth straight week, falling US 50 cents since early April in the longest losing streak since a 14-week decline, ending in early January 2009. The latest price puts retail diesel at 23.4% below the record-high level of US$4.764 a gallon, hit on July 14 2008. Back then, diesel carried a premium to a year earlier of US$1.875 a gallon as crude oil prices soared to record highs near US$150 a barrel.

Oil rebounded in New York on Tuesday after the biggest drop in two weeks as a labour strike threatened to halt production in Norway, Western Europe’s biggest exporter. West Texas Intermediate oil for August delivery climbed as much as 60 cents to US$85.05 a barrel in electronic trading on the New York Mercantile Exchange.