WINDHOEK – The price of all grades of fuel is set to decrease on Wednesday at 00h01. It will mark the second decrease in fuel prices this year.
A media statement issued by Mines and Energy Minister Isak Katali last Friday stated 93 Octane Lead Replacement Petrol will decrease by N$0,75 cents per litre, bringing the price to N$9,28 per litre.
The price of 95 Octane Unleaded Petrol will also decrease by N$0,75 cents per litre, bringing it to N$9,40 per litre; while the diesel price is set to be reduced by 50 cents per litre, making it N$9,86 per litre.
“Global oil prices have declined drastically, the biggest (decrease) in three years owing to signs of slowing growth in countries with an enormous appetite for oil, most notably China and the United States of America (USA),” Katali said.
He added that the deepening economic slump in Europe has also contributed immensely to low crude prices.
The minister stressed that from a demand-supply perspective, factors that play a major role in determining the prices of tradable commodities include the fact that there seems to be a substantial amount of oil in the market, hence the demand has not surpassed supply to drive the prices up.
He also noted that it is important to caution that the European Union (EU)’s sanctions on oil imports from Iran came into effect on July 1, a supply disruption that would see a million barrels of oil removed from the market per day.
The sanctions are meant to deprive funding for the Iranian government and what is believed to be an effort by Iran to build nuclear weapons.
It is therefore expected that prices of crude oil may increase sharply again in the months ahead if a shortfall in supply of oil prevails for a relatively longer period.
The media statement also said that the Motor Vehicle Accident (MVA) Fund has been asking for an increase on its levy since last year, but due to unfavourable prices in the oil market, the ministry has so far not been able to grant the increase.
Katali said his ministry has however now decided to increase the MVA Fund levy by two cents per litre on both petrol grades, as well as diesel.
The National Energy Fund fuel levy will also be increased by five cents per litre, enabling it to fulfill its obligation of financing the strategic fuel storage facility.
The minister said the storage facility is a national project which, upon completion, will ensure the future security of oil supply in the country “during hard times.” – Nampa