Despite the Namibia Dollar improving slightly against the United States Dollar, motorists will have to fork out 30 cents a litre more for petrol and 50 cents a litre more for diesel, as from one minute past midnight on Wednesday, July 6.
“The average exchange rate during June dropped 20 cents from N$15.30 to N$15.10 per US dollar and it did not have any major effect on minimising the under-recoveries recorded for the period reviewed,” said Minister of Mines and Energy Obeth Kandjoze in a statement released on Friday.
He noted that Saudi Arabian oil inventories fell by more than 38 million barrels since October 2015, taking oil storage down to a two-dayer low of 290 million barrels.
“On the other hand, the US has seen over the last month the levels of crude oil sitting in storage decline, falling from 80-year record highs. Inventories have dropped more than 10 million barrels since May, offering class that suggest that the oil market is moving closer to a supply/demand balance,” Kandjoze’s statement read.
Kandjoze added that the latest fuel price review indicates that the average Freight On Board prices per barrel increased slightly by about US$0.60 for petrol and US$3 for both diesel grades. Barrel prices for refined oil are inching towards US$60 on all regulated hydrocarbons.
“The Basic Fuel Price Rate Slate calculations for the past month recorded under-recoveries on all the regulated petroleum products. The under-recoveries recorded are sufficient to trigger an increase in local pump prices.
“However, the National Energy Fund will have to absorb about N$0.04 per litre for ULP 95 and N$0.28 per litre for both diesel grades of these under-recoveries by compensating fuel importers to spare motorists the full cost of the price increase,” Kandjoze explained.