Another Petrol Price Rise

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By Wezi Tjaronda WINDHOEK Just two months after the first fuel increase this year, fuel prices are yet again set to go up, as from tomorrow. In mid-January this year, the Ministry of Mines and Energy increased prices of controlled petroleum products, which are petrol and diesel, by 16 cents per litre. As a result of this increase the Namibia Bus and Taxi Association (Nabta) will today send out letters to its regional offices on whether the association should effect an increase or not. The association can effect an increase within ten days of the increase after which it will have to apply to the Ministry of Works, Transport and Communication to effect an increase. Nabta last increased taxi and bus fares in May/June last year when the taxi fares rose to N$6.00 while bus fares were increased by 10 percent. Nabta President Magnus Nangombe told New Era yesterday that the costs of maintenance had gone so high that operators would not be making any profit if fares remained the same. The decision however rests with regional offices. This is the sixth time the price of one of the most important sources of energy will rise. This time, lead replacement petrol (LRP) and unleaded petrol will go up by 12 cents per litre while the wholesale price for diesel will increase by 21 cents per litre. The new pump prices at Walvis Bay are N$5.37 per litre of LRP, N$5.39 per litre of unleaded petrol and N$5.30 for diesel. Permanent Secretary in the Ministry of Mines and Energy, Joseph Ita, announced on Thursday that the fuel increase would come into effect at 01h00 tomorrow, April 19, 2006. He said the ministry was left with no choice but to increase the prices of controlled petroleum products due to the prevailing situation of the cumulative slate under-recovery in the local market. Ita said the increase could be attributed to various factors such as rising oil prices due to threats of supply in major oil producing countries such as Iran, Nigeria and Iraq. While the price of crude oil has this year hit the US$70 mark, and dealers are anticipating potential supply disruption and an increase in demand growth for the summer driving school, oil has also rose to 13 percent since the beginning of the year due to concerns over the Opec producers Iran, Iraq and Nigeria. “Iran is at odds with other countries over its nuclear programme, rebels have knocked out nearly a quarter of Nigeria’s output and Iraq’s exports are at their lowest since the uprising in that country,” said Ita. There has also been strong demand growth in the United States and China, two of the largest energy consumers, and the oil industry may struggle to match the voracious consumption. This being the case, Nabta is looking at other ways of making money to avoid passing on the increase to consumers every time there is an increase. At the moment, the association is looking into vehicle ‘outdoor advertising’ and also group buying from which taxis and buses can make extra money. Nangome said the association is at the moment in a process of developing cards for the operators to use when buying tyres and other accessories for vehicles on a discounted rate. “We are trying to create benefits for bus and taxi operators where they will buy at discount rates and in that way we will not be increasing fares whenever there is an increase in fuel,” he added. So far, only two taxis have been approved by the association and the municipality to have ‘outdoor advertising’.