Fuel up by 40c a litre on Wednesday

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The fuel price will increase for the first time this year as the global oil price continues to hover at a four-and-a-half month high amid concerns over disruptions to supplies from the Middle East.

The Ministry of Mines and Energy yesterday announced that both petrol and diesel will increase by 40 cents per litre at 00h01 on Wednesday, May 06.

“The strength of oil prices in April has confounded many predictions, and industry experts are forecasting price volatility amid a stuttering demand recovery and unpredictable reactions from oil producers,” said Mines and Energy Minister, Obeth Kandjoze, in a statement released yesterday.

Kandjoze noted that after a request from the local oil industry to consider adjusting the industry margin his ministry resolved to increase the margin by 12 cents per litre on the prices of unleaded petrol and all grades of diesel as of May 06.

The new fuel prices will therefore increase by N$10.39 per litre for unleaded petrol, N$0.32 for diesel 500ppm and N$10.42 for diesel 50ppm. According to Kandjoze global crude oil prices gained nearly 16 percent from the start of April ending the third week of April at around US$65.28 per barrel.

Many industry experts predicted that the first quarter of 2015 would involve continued price weakness as the refinery maintenance season added to the market’s woes.

Crude oil prices collapsed last year from a high of US$115 per barrel to a low in mid-January this year of US$46.59.
This collapse was caused mainly by booming oil production in the United States and the Organisation of Petroleum Exporting Countries’ (OPEC) unwillingness to respond with output cuts.

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