Motorists have been given a reprieve for the month of October 2022 after the Ministry of Mines and Energy decided to reduce petrol price by 100 cents per litre, while diesel prices will remain unchanged.
This comes as oil prices continue to decline during September 2022, and the current levels represent the lowest since January 2022, amid growing concerns that a projected economic slump could harm global demand in energy markets.
According to Andreas Simon, Senior Public Relations Officer for the Mines and Energy Ministry, the new fuel prices in Walvis Bay will be N$ 20.08 per litre for petrol and N$ 22.12 per litre for diesel. The remainder of the country’s fuel prices will be adjusted correspondingly.
These changes will take effect at 00:01 on October 5, 2022.
‘’The Ministry recognises that the situation in the international oil market is steadily improving for the better, although geopolitical instability and market volatilities might continue to have an unwanted impact on local fuel prices,’’ he said.
Meanwhile, the price of West Texas Intermediate crude in the United States has dropped to around $79 per barrel, its lowest level since January 2022, amid rising recession fears, while the price of Brent crude in the United Kingdom has risen to over $87 per barrel.
However, oil prices may still rise since global supplies may be further constrained in the long run as sanctions on Russian energy tighten due to the ongoing conflict in Eastern Europe, according to Simon.
The latest calculations by the Ministry indicate that the average price for Unleaded Petrol 95 over the period of 01-23 September 2022 was at USD98.794 per barrel compared to USD110.334 per barrel at the end of August 2022, a huge decrease of about USD12 over the review period.
Additionally, the average price for Diesel 50ppm over the period of 01-23 September 2022 was at USD133.675 per barrel compared to USD136.360 per barrel at the end of August 2022, a much lower decrease of about USD3 per barrel over the review period.
Furthermore, the exchange rate figures for the period of 01-23 September 2022 indicate that the
Namibia dollar depreciated against the USD at N$17.4573 per USD compared to N$16.6985 per
USD at the end of August 2022. This currency depreciation has a negative effect on the import parity price calculations and the local pump prices of fuel.
‘’Therefore, after entering the above input factors into the fuel pricing model, the Ministry recorded a combination of a high over-recovery on petrol and a low under-recovery on diesel, namely an over-recovery of 234 cents per litre on petrol and an under-recovery of about 33 cents per litre on diesel,’’ said Simon.
In addition, he said that the Ministry has also resolved to reinstate the road user charges and the MVA levy back to their original levels while the NAMCOR levy will remain at its current level until further notice.