01 Mar 2016 13:10pm
WINDHOEK, 01 MAR (NAMPA)- The Ministry of Mines and Energy has announced a decrease in petrol and diesel pump prices as from 00h01 on Wednesday.
Fuel pump prices at various inland destinations will decrease as follows: 95 Octane Unleaded Petrol decrease by 50 cent per litre (retail); and diesel (all grades) decrease by 30 cent per litre (wholesale), according to a media statement issued on Monday.
The Minister of Mines and Energy, Obeth Kandjoze said global oil supply growth continues to take a toll on oil prices, despite several meetings held by the worlds biggest oil cartel - Organization of the Petroleum Exporting Countries - (OPEC) to arrest the situation.
Although oil prices are low globally, local motorists have not enjoyed the full benefits in the form of low fuel pump prices due to a sudden increase in the exchange rate of the Namibia dollar against the US dollar. As we might all know, oil is traded in US dollar, and an appreciation in the US dollar meant that local oil importers had to pay more in terms of the local currency to bring oil to our shores.
The average US dollars/Namibia dollars exchange rate for the period under review was N$15.82, slightly higher than the previous months.
Refined oil prices per barrel picked up slightly during the course of February to an average of US dollars 44 for gasoline (about N.dollars 696.08) for petrol and US dollars 38 (about N.dollars 601.16) for gasoline (diesel).
Kandjoze stressed when the aforementioned conditions got filtered through the local oil market, over-recoveries were recorded because the average prices for refined petroleum products remain higher compared to our current pump prices, especially petrol thats price has not seen huge decreases in recent months.
It is only fair if pump prices are reasonably reduced to a sustainable level for both the importers and consumers, given the prevailing oil market conditions, Kandjoze noted.
The latest Petroleum Activities Return (PAR) report has shown that oil companies are not making enough returns on their investment in the petroleum sector and there is a great need to adjust their margins to a level that would encourage further investment.
The ministry has, therefore, decided to grant an eight-cent per litre increase on the Industry Margin to that effect. An additional increase of 0.68 cent per litre is equally granted on the Service Differential for the maintenance of oil storage facilities (depots) and fuel handling costs incurred by oil companies.
The over-recoveries per product on the basic fuel price import parity landed in Walvis Bay calculated at 25 February 2016 are: 95 Octane Unleaded Petrol at 79.032 cents per litre; diesel 500 parts per million (ppm) at 50.870 cents per litre; and diesel 50 parts per million at 51.958 cent per litre.
Thus, the new Walvis Bay pump prices will be: 95 Octane Unleaded Petrol at N.dollars 10.04 per litre; diesel 500 parts per million at N.dollars 9.42 per litre; and diesel parts per million at N.dollars 9.47 per litre.