29 Sep 2017 16:30pm
WINDHOEK, 29 SEP (NAMPA) The fuel pump prices for October will remain unchanged, Minister of Mines and Energy, Obeth Kandjoze announced on Thursday.
This means pump prices will remain at N.dollars 10,80 per litre of unleaded petrol, N.dollars 10,63 per litre of Diesel 500 parts per million (ppm) and N.dollars 10,68 for Diesel 50 ppm.
Oil price is the cornerstone of the global economy, and fuel price is not just a cost to motorists at the pumps but also a cost factor in numerous other items, from food to flight tickets, said Kandjoze in a media statement.
He explained that the demand for energy was given a boost in September, as a result of emerging economies and the Eurozone which recorded some level of growth.
As a result, global crude oil process somewhat picked up, hovering above US.dollars 60 throughout the month of September.
The minister said the pinch of surging crude oil prices and a weak local currency is mostly felt by net importers in Namibia, where individual oil companies are price-takers and eventually pass on the cost to consumers through a cost-recovery model.
Refined petroleum products hovered around US.dollars 65 per barrel in September, bringing about huge under recoveries.
An under recovery situation means that oil companies incurred more cost in the previous month than the price consumers were charged at the pump.
The regulator therefore needs to adjust the fuel pump prices upward to ensure fuel importers are fairly compensated, he said.
Kandjoze added that the National Energy Fund (NEF) would absorb all the under recoveries recorded on both petrol and diesel in September for fuel prices to remain unchanged around the country, through its mandate of equalising fuel pump prices with income generated from the NEF Equalisation Levy of fuel pump prices with income generated from the levy.
An estimated N.dollars 70 million is expected to be paid to fuel importers as a result of the unchanged fuel prices.
Fuel prices dropped by 50 cents in July and remained unchanged in August before recording a 30 cent increase for September.