Fuel price hike due on Wednesday

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Price hike… Fuel will increase by 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.

Windhoek

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.

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