Fuel Price Climbs Again

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By Petronella Sibeene WINDHOEK Another increase in the fuel price, mainly attributed to various factors such as instability in the Middle East, takes effect from midnight today when motorists will again have to dig deeper into their pockets. The latest increase – one of several since the beginning of the year – will mean the retail price for lead replacement petrol (LRP), unleaded petrol (ULP) and the wholesale price for diesel goes up by N$0,50 cents. At Katima Mulilo and at Rundu motorists would have to pay N$6.66 for a litre of LRP (93), ULP (95) will cost N$6.68 a litre while diesel will cost more at N$6.74 a unit. At Oshakati, LRP (93) will now cost N$6.65, ULP (95) will go for N$6.67 while diesel will sell for N$6.73 per litre, while in Windhoek where there are more vehicles LRP (93) will now cost N$6.59/litre, ULP (95) will cost N$6.61 while diesel will go for N$6.68. At Walvis Bay the prices of the same will be N$6.44, N$6.42 and N$6.50 per litre respectively while at Noordoewer in the far south LRP (93) will cost N$6.80/litre, ULP will go for N$6.82/litre and diesel N$6.88. According to the minister, the international crude oil prices have reached a record high with prices ranging from US$75 to US$78 per barrel due to the violence in the Middle East involving mainly Israel and its neighbours. “The crude oil prices are being determined and driven by expectations of continuing economic growth, driving the demand for fuel (in China) coupled with natural disasters (hurricanes in the USA) in an environment of low surplus capacity,” said the minister. Lately, Namibia has been in a better position compared to its neighbour South Africa where ULP (95) was in July at six percent higher than in Namibia and LRP (93) was 2.9 percent higher. Considering that the Ministry of Mines and Energy is the custodian of setting fuel prices in the country, it has no choice but to find ways of coping with all the international crude oil price changes. “It should be emphasised that although the ministry endeavours to keep fuel prices to the bare minimum as it has a huge impact on the economy of the country it will harmonize fuel prices with neighboring states to be fair in respect of pricing mechanisms used,” the Minister of Mines and Energy Erkki Nghimtina said in a statement. He however forewarned Namibian consumers that they must prepare for possible further increases this year as fuel prices take effect in the global market. He said Namibia is at the mercy of oil producing countries and it has no influence on fuel prices considering it neither produces nor refines oil. Though these price increases have brought about mixed feelings among the masses across the country one local economist Martin Mwinga explained to New Era that the fuel hike announcements are necessary and should be expected as long as international oil prices remain high. “Unfortunately, a high oil price is something beyond the control of government and therefore the frequency of the petrol price changes will be dictated by international oil markets,” he remarked. If the government tries to keep petrol prices low despite the high international oil prices, it would then mean that it finds money elsewhere to subsidise petrol prices or will run a high budget deficit. Mwinga also assured that this is likely to be a temporal situation, which will someday reverse itself once the international oil prices come down.