By Petronella Sibeene WINDHOEK While the fuel price continues to drop in neigbouring South Africa with the latest price decrease of 21 cents per litre implemented yesterday, Namibian consumers might have to wait a little longer for the effects to trickle down into their pockets. The Minister of Mines and Energy Erkki Nghimtina told New Era that a decrease in the fuel price might not be immediate because his ministry has to take a hard look at the backlog on the slate account. The slate account is the hedging fund advanced by the government to the Ministry of Mines and Energy for fuel procurement against high international oil prices on the international market. Due to high fuel prices on the international market that also affected Namibia, the National Energy Fund was depleted. In March last year, the ministry borrowed N$250 million from government and an additional N$50 million from the National Petroleum Corporation of Namibia (Namcor). With the instability in the fuel industry, the ministry has to pay back this amount and cannot subsidize prices at this stage, until the National Energy Fund is in a position to do so again. Minister of Finance Saara Kuugongelwa-Amadhila during the tabling of the 2006/7 national budget acknowledged the then continued global oil and fuel price rise over the past year. She said the slate account of the National Energy Fund cushioned most of the effects of the international oil price hike. This resulted in accumulated deficits in the National Energy Fund. The current budget makes a budgetary provision to offset the fund’s accumulated losses of N$206 million. “Our hope is however that the National Energy Fund will revert back to the operational mode as envisaged in the governing legislation which requires the fund to be self-sustainable,” she stated. The minister declined to disclose how far his ministry has gone in reducing the backlog of N$300 million but added that “the ministry is currently observing the fuel price situation. “We will have to come up with an assessment later. The slate account is really affecting us, we are in debt”, he said. Deputy Director in the Directorate of Energy, Emmanuel Nghishongele, said the public might be informed of the ministry’s stance on fuel prices in the coming week or two. The price of fuel in South Africa was adjusted by 21 cents per litre for retail prices for petrol 91 (ULP), 93 ULP & LRP, petrol 95 ULP & LRP with effect from yesterday, November 1. The price of illuminating paraffin decreased by 17 cents per litre. Wholesale prices for diesel 0.05% sulphur saw a 2 cents per litre decrease while diesel 0.005% sulphur went down by 1 cent per litre and illuminating paraffin 13 cents per litre. After several announcements on fuel price hikes in the country, the ministry two weeks ago reduced its pump price – by 26 cents – for the first time this year. The increasing prices earlier were necessitated by the international crude oil prices that had reached a record high ranging from US$75 to US$78 per barrel due to the violence in the Middle East involving mainly Israel and its neighbours. Saved by the Namibian dollar appreciation against the US dollar, the decrease in the international crude oil prices and the over-recovery experienced in the local market, the Namibian consumer finally had a sigh of relief. Currently, fuel prices range between N$6.16 and N$ 6.18 depending on the town. Nghimtina in his statement then explained that during August 2006, the average Namibian dollar to US dollar exchange rate strengthened slightly. Coupled with the fall in crude oil prices from over N$78 to below US$ 60 per barrel, this had a positive effect on the unit over-recovery, which led to the stabilizing fuel prices in the local market. Though the good news, he cautioned that the favourable average exchange rate and the softening of international crude prices could be short-lived as the US dollar started strengthening against the local currency for the September month through to October. The minister also revealed that members of the Organization of the Petroleum Exporting Countries (OPEC) are envisaging curtailing their crude output to reduce stock build up in a bid to revive the falling crude oil prices and a weakened demand brought about by persistence high crude prices in its previous quarter of 2006.
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