01 Jul 2017 16:00pm
KEETMANSHOOP, 01 JUL (NAMPA) The Ministry of Mines and Energy on Friday announced that petrol and diesel pump prices for July will decrease as from Wednesday, 05 July at 00h01.
The retail prices for both petrol and diesel at fuel pumps countrywide will decrease by 50 cents, Minister of Mines and Energy Obeth Kandjoze said in a media statement.
He attributed the decrease to substantial over-recoveries recorded in the local fuel market after prices of both crude oil and refined oil were overestimated recently.
The prices defied recent forecasts based on the Organisation of Petroleum Exporting Countries (OPEC) agreement to cut oil production a few months ago, Kandjoze said.
The expectations were that by June, the prices would be hovering above US.dollars 65 per barrel, but for the past four months, prices have not reached that threshold, he added.
June recorded US.dollars 60 and US.dollars 57 per barrel of refined diesel and petrol respectively.
Kandjoze further said the exchange rate between the Namibia Dollar and US (United States) Dollar also performed favourably during the period under review.
The average exchange rate for June was N.dollars 12.88 compared to Mays average of N.dollars 13.22.
This means importing fuel to our shores was less costly in June compared to May. Moreover, the cost for shipping oil tankers also decreased in June to US.dollars 145.70 per metric tonne from US.dollars 151.30 in May.
The minister said that by the time all cost elements filtered through the local market, the over-recoveries were noted.
This meant that for the past few months, consumers did not get relief at the pumps because the results of the basic fuel price model were not favourable, Kandjoze said.
It is only fair that they get some relief this time around when the conditions are favourable, he noted.