‘Fuel Price Hike Will Roll Down’

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By Francis Tsawayo WINDHOEK The increase in the pump price of fuel is likely to see consumers resorting to belt-tightening. Petrol prices went up in January, in April and again last month in June while the fourth increase is likely to be effected soon. The Minister of Mines and Energy Erkki Nghimtina previously warned consumers to brace themselves for tough times ahead as they would at some point dip yet again deeper into their pockets to pay for the increase in the fuel price. The situation sparked mixed feelings on the part of the public when they were approached for comment. Several motorists showed serious concern. Most said they were still adjusting their budgets for the current pump price. “I do not know what to be concerned about anymore, the fuel prices or the situation in the Middle East. I watch more news anticipating the day the situation gets better so that my pocket can also get some peace,” a Windhoek farmer said as he drove away in a four-wheel drive pick-up. “I’m not worried if fuel is going up,” another member of the public said. “Fuel price hikes are inevitable but the frequency is what strikes fear into my heart. If another hike is forthcoming this week that means four times in six months,” he added. “Government’s intervention is needed to slow this process down,” he suggested Apart from motorists, the petrol attendants from around the city centre say they are always busy as cars queue at service stations. According to one attendant, people do not fill their car tanks as much as they used to. A mother of three school-going children revealed how people are now organising themselves in groups to shuttle children to and from school. “This has always been done but each day more and more people are trying the method. My family and friends adopted the method early this year and it has been working well.” Although minor budget adjustments have been made her main concern was the price of basic commodities. “Food has become expensive and if the fuel price goes up again life is going to get tough,” she warned. Klause Schade, an economist with the Namibian Economic Policy Research Unit (NEPRU) said another fuel hike would have far-reaching consequences. “Though the first to be affected are those in the transportation, import and exportation sectors the impact would roll down in a domino effect right to the common man.” Schade’s analysis of the situation confirmed what another economist, Martin Mwinga had previously said that raising fuel costs impact on the economy through higher inflation and as a direct cost to manufacturers and traders. If inflation continues to rise the bank will increase the rate, which would then increase the cost of capital, thereby slowing spending and affecting the GDP negatively.