WINDHOEK – The newly announced fuel price increases would heavily affect those living in the northern regions, who as of this coming Wednesday, must pay nearly 10 cents per litre, more than everyone else inside the country. The Wednesday price increases would not apply to those in Walvis Bay. The increases are partly a result of a reorganisation of TransNamib’s rail routes and fuel distribution points, which now have Ondangwa as the distribution point of fuel to other northern towns. Previously, the bulk fuel was transported on rail from Walvis Bay up to Tsumeb, from where it was distributed to other towns further inland.
As a result, all towns that are going to be supplied with fuel that has been transported by rail from Walvis Bay to Ondangwa would as on Wednesday have to pay additional 20 cent per litre for 95 unleaded petrol and 19 cents per litre for diesel.
Everyone in the interior of the country – except those supplied from Walvis Bay and Ondangwa – would have to pay an additional 10 cents per litre for 95 unleaded petrol and 10 cents per litre for diesel for wholesale.
“Ondangwa was declared a pricing town in April and the cost implication was that the transport cost of fuel to Ondangwa, on the rail, from Walvis Bay in the price build-up had to be adjusted from the rates applicable to Tsumeb, where all the northern towns were supplied from,” said energy minister, Tom Alweendo.
TransNamib has also asked, and was given by government, an increase in its rates to transport bulk fuel on rails. That increase is to accommodate a request by TransNamib to have its bulk fuel rail rate increased by 10 cents per litre. Alweendo, said in a statement that “TransNamib bulk fuel rail rate in the fuel price build-up has not been adjusted since 2015 and TransNamib requested an adjustment in-line with the annual inflation rate in order to execute their plans of giving more fuel runs to various towns around the country”.
The ministry noted that the price of importing fuel in June was so high that fuel importers were paying more than what they were getting at the pump prices in the country.
“Times are tough and mindful of the fact that oil price is the corner stone of the global economy in that it is not just a cost at the pump to motorist, but also a cost factor in the price of numerous other commodities, from the food on our tables to flight tickets, the National Energy Fund will subsidise for every cent due to oil companies that would otherwise have triggered a price increase,” said Alweendo.
June saw prices for refined oil hovering above US$85 per barrel and net importers of oil are at the receiving end of these sky-high prices, the ministry said. It also points out that the exchange rate between the Namibian dollar against the US dollar has not been favourable in June either, as a major depreciation was recorded, from an average of N$12,52 in May to N$13,10 in June.
Part of the good news to consumers is that the huge under recoveries – the difference between the high price paid to import oil in the country and the lower price of oil paid at pump in the country – would not be passed onto the consumers but would be subsidised by the National Energy Fund. The under recoveries were so huge that as at June 25, the unleaded petrol landed at Walvis Bay was short of N$52,6 cents per litre, while for diesel 500ppm was short N$45,8 cents per litre and for Diesel 50ppm, it was N$45,3 cents per litre below.