For the fourth month in a row the price of fuel shot up again this week, increasing by a third across the board. In Walvis Bay fuel pump prices for petrol and diesel, increased by 33 cents per liter for 93 Octane Lead Replacement Petrol, 95 Octane Unleaded Petrol increased by 39 cents per liter while Diesel increased by 13 cents per liter. In Walvis Bay pump prices now stand at N$10.30 per liter for 93 Octane, N$10.42 per liter for 95 Octane and N$10.48 per liter for Diesel. Pump prices at various inland destinations countrywide are adjusted accordingly. The Ministry of Mines & Energy (MOE) approved the increase of fuel prices around the country as from Wednesday 16 May.
“There has never been a perfect time to be a consumer in Namibia,” said Isak Katali, the Minister of Mines and (MME) Energy, last week. “Past events in the local oil market and the continuing unfavourable developments in the global oil markets make it difficult for consumers to scrape by,” he said.
“Brent crude oil prices have risen with over 13% this year, trading at above US$130 in the Middle-East and countries along the Mediterranean, from which Namibia imports crude oil,” he explained. “These skyrocketing prices threaten a nascent recovery of the global economy. Moreover, concerns of supply shortage due to production problems in some producing countries, and as the US and European sanctions target exports from OPEC’s second largest producer, Iran, have helped keep the crude oil price above that mark. The situation in the global oil market remains the same and the cost of bringing oil to our shore is quite high, hence the recorded under-recoveries for the month of April,” Katali said. The Minister noted that the exchange rate between the Namibia Dollar and the US dollar, “in which crude oil is traded has also been weakening, thereby negating companies that import oil.” He also announced that, “after a long-overdue comprehensive Dealer Margin Survey for the financial year 2010/2011, it was revealed that dealers in the local oil market are operating at a loss and there is a need to adjust their margin by 5,657 cents per liter, on all controlled petroleum products. The Ministry has thus decided to increase the Dealers’ Margin with 3 cents per liter across the board and the remaining will be added later.”
Chairman of the Association of Service Station Owners, Rupert Harmse, explained the likely impact of the fourth successive fuel price increase this year: “The average consumer has a salary income and most work according to a budget,” he said. According to Harmse, such a fuel budget would allow for the spending of a certain amount and that amount would buy fewer liters with the new increase. “We earn per liter,” he said on Tuesday, “even though the dealer margin increases from 65 cents to 68 cents tomorrow, we are selling less liters so we are making less money.” Petrol prices in South Africa increased by 28 cents per liter. The African People’s Convention called the price rise “robbery without violence” and spokesperson Patrick Sindane protested that, “South Africans are already struggling with high electricity and food prices and the ever-increasing petrol price.”