Another Fuel Price Rise

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By Wezi Tjaronda WINDHOEK The volatility in the oil industry will not spare Namibian consumers who will yet again this Wednesday dig much deeper into their pockets to pay for fuel. As if this is not enough, the Ministry of Mines and Energy (MME), which announced the fuel price increase to come into effect this Wednesday June 7, says consumers should prepare themselves for tough times ahead. New pump prices for controlled products have therefore been increased by 20 cents per litre for Lead Replacement Petrol (LRP) and Unleaded Petrol and 35 cents per litre for diesel. Diesel, which used to be the cheapest, will now cost more at N$5.65 per litre while LRP and unleaded petrol will cost N$5.57 and N$5.59 per litre respectively at Walvis Bay. This is the third time since the beginning of the year that fuel prices are going up, with the last increases effected in January and April. For a 46-litre sedan car that used N$183 to fill up four years ago in 2002, the same car now fills up with N$263. MME Permanent Secretary Joseph Ita said in a press statement on Friday, although the ministry wants to keep fuel prices to the bare minimum considering its huge impact on the economy, it will harmonise fuel prices with neighbouring states to be fair in respect of pricing mechanisms used. Namibia imports most of its fuel from neighbouring South Africa, where fuel has already passed the N$6 mark. The fuel price in Namibia and South Africa has a difference of 14.3 percent, 12.5 percent and 6.8 percent for unleaded petrol, LRP and diesel respectively. “It is evident that for the month of June 2006 only, unleaded petrol, LRP and diesel were 8c/l, 7c/l and 38c/l higher respectively in South Africa than in Namibia, which makes the Namibian consumer better off than the southern neighbour,” Ita said. He added that the ministry has the responsibility to cope with all the international crude oil price changes, the Namibia dollar/US dollar exchange rate fluctuations and also pressures for internal increases on fuel price elements. Last month, Minister Erkki Nghimtina warned consumers to brace for tough times ahead as they would at some point dip yet again deeper into their pockets to pay for fuel. He said Namibia being a country that does not produce or refine oil is at the mercy of oil producing countries and has no control over fuel prices. Geopolitical pressures bearing down on the industry have shown little prospects of oil prices weakening, unless the tensions fade and there is a collapse in oil demand, neither of which, according to Ita, are likely at the moment.