Windhoek-Local motorists will be hard hit today when as of 00h01 this morning petrol (ULP 95) prices officially hit the N$11 per litre mark.
The Ministry of Mines and Energy increased petrol by 32 cents per litre.
Both grades of diesel were increased by 25 cents, bringing the Walvis Bay diesel pump prices to N$10.83 per litre for Diesel 500ppm and N$10.88 for Diesel 50ppm.
“The basic fuel price unit rate slate calculations for the past month recorded high under-recoveries on all the regulated petroleum products,” mines and energy minister Obeth Kandjoze said in a statement.
“The under-recoveries recorded are sufficient to trigger an increase in local pump prices. However, the National Energy Fund will meet Namibian fuel consumers halfway by absorbing a portion of the under-recoveries recorded.”
According to Kandjoze the production cuts by the Oil Producing Exporting Countries (OPEC) members and Russia to balance the oversupplied crude oil market is the main reason for the current rally in oil prices.
“OPEC has achieved about 90 percent compliance rate on the proposed cuts in January 2017, whereas, the non-OPEC members who had supported the cuts have achieved 60 percent compliance,” the minister said.
“However, even after achieving close to their targeted 1.8 million barrels a day of production cut, the huge stockpiles have not reduced. On the contrary, US crude stocks have risen 39 million barrels this year, to 518 million, since OPEC started cutting production in January.”
Kandjoze pointed out that the average exchange rate remained stable at about N$13.2656 per US dollar over the period reviewed. However, he said despite this stability, financial markets were particularly heavily affected by OPEC’s announcement to cut output.
According to Kandjoze’s statement, the original cost for the Strategic Oil Storage Facility has gone up. “The Cabinet has therefore authorised an increase of 10 cents per litre from all fuel products towards the National Energy Fund (NEF) Strategic Oil Storage Levy. The Strategic Oil Storage Levy will therefore increase from 50 cents per litre to 60 cents per litre on all fuel products,” said Kandjoze.
In addition, an annual survey for the dealer margin was completed in November 2016 and based on the results of the survey, it was recommended that the margin should be adjusted with 4.228 cents per litre. According to yesterday’s statement the dealer margin levy will therefore increase with 4 cents a litre from 93 to 97 cents a litre on both fuel products.
Namibia’s annual inflation rate increased from 7.3 percent in December 2016 to 8.2 percent in January 2017, which was already the highest level since October 2009.