27 Sep 2013 12:20
WINDHOEK, 27 SEP (NAMPA) Owners of diesel vehicles will have to dig deeper into their pockets when diesel prices increase next week.
The price of diesel will increase on Wednesday (02 September), Mines and Energy Minister Isak Katali said in a media statement issued here on Friday.
Petrol prices will however remain unchanged.
Diesel 500 parts per million (ppm) will increase by 45 cents per litre (wholesale) to cost N.dollars 12,27 per litre. The new diesel 50ppm will also increase by 45 cents per litre to cost N.dollars 12,33 per litre.
Katali explained that during the first days of September, the global oil market was mostly characterised by the possibility of military action in Syria by the United States of America, which would have disrupted the Mid-East's oil supply routes and would have pushed prices up.
That has now been pushed off the table, but traders react with their time to bring oil prices down through speculation, he stated.
This, the minister said, landed the month under-review in a situation of old high oil prices, most notably diesel.
In Kuwait, diesel has been trading above US.dollars 126 (approximately N.dollars 232) per barrel throughout September.
Filtered through the local market, this led to huge under-recoveries on diesel grades at the end of September, Katali noted.
Locally he said, the N.dollars/US Dollar exchange rate continued to fluctuate in September, but not dismally.
He said oil companies always face the risk of massive fluctuations in the exchange rate, and thus the import parity led to under-recoveries just as in the previous month, although the current ones are marginal.
Katali said through the National Energy Fund (NEF), Government will subsidise a reasonable portion of the under-recoveries and pass the rest on to the consumers.