Petrol Price Drops

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By Surihe Gaomas WINDHOEK The price of fuel is set to go down from tomorrow morning. According to a press release issued by the Ministry of Mines and Energy yesterday, the price will go down by 30 cents per litre from the previous price of N$6,32 per litre. The latest revision of the fuel price comes as a result of a favourable average of the exchange rate and softening of international crude prices, which have positively stabilized fuel prices in the local market. “At present, the Ministry of Mines and Energy would like to pass the benefit of over-recoveries accrued during November 2006 in the local market onto the consumer to ease the burden imposed on them,” reads the statement from the Minister of Mines and Energy, Erkki Nghimtina. For now, the new Walvis Bay fuel pump prices for controlled petroleum products, petrol and diesel will therefore be reduced as follows: The retail price of 93 octane lead replacement petrol decreases by 30 cents per litre from N$6,32 to the new price of N$6,04, while 95 octane unleaded petrol also goes down by the same rate of 30 cents per litre to N$6,04. As for diesel, the price goes down by 25 cents per litre to N$6,04 per litre. Also included in the latest adjustments is that the fuel levy will increase to 2 cents per litre, the RFA levy will rise by 6 cents per litre, the MVA levy is to go up by 4 cents per litre and the dealer margin is set to increase by 4 cents per litre. The ministry further stated that during November 2006, the average Namibian dollar to the US dollar exchange rate weakened slightly, whereas the US dollar has strengthened against the Namibian dollar from September right through to November this year. Despite this weakened average exchange rate coupled with the sharp decline in crude prices from over US$78 to below US$60 per barrel, oil prices continue to float between US$57 and US$62 a barrel. This ultimately caused the Namibian unit’s over-recovery favourably, which led to the stabilizing of fuel prices in the local market. However, the ministry cautions that the favourable exchange average rate and the softening of international crude prices could be short-lived as international crude prices rose slightly in December. This happened especially after the announcement that the Organization of Petroleum Exporting Countries (OPEC) apparently has reduced oil production by 800 000 barrels per day. In addition, an endorsement of a counter-season proposal to reduce production from OPEC with effect from the first of last month never materialised by OPEC member countries which are looking forward to come up with an agreement to make a second production cut when OPEC ministers meet tomorrow (14 December) in Nigeria. Seeing that prices of crude oil remain volatile, the Ministry of Mines and Energy says it is worthwhile to wait and see what happens after the OPEC ministers meeting in Nigeria tomorrow, as this might push up crude prices to the margins of US$70 per barrel. All pump prices at various destinations countrywide will be changed according to the fuel price reduction.