Motorists will not have to worry about having to dig deeper in their pockets for fuel in the month of February, as prices remain unchanged.
This is after the Ministry of Mines and Energy announced today that the exchange rate figures for the period of 01-20 January 2023 indicate that the NAD has slightly recorded another appreciation against the USD at N$17.0079 per USD compared to N$1 7.2657 per USD at the end of December 2022, which was outweighed by the increases in barrel prices and freight rates.
Therefore, after entering the input factors into the fuel pricing model, the Ministry recorded under-recoveries on both petrol and diesel, namely an under-recovery of 85 cents per litre on petrol and an under-recovery of 43 cents per litre on diesel.
“The Ministry is hereby announcing that despite the under-recoveries recorded. The fuel prices across the country for February 2023 will remain unchanged”, read the statement.
Fuel prices in Walvis Bay will remain at N$ 20.65 per litre for diesel and N$18.28 per litre for petrol. The National Energy Fund is said to absorb the under-recoveries on behalf of fuel consumers to the tune of approximately N$50 million.
Simon Andreas the spokesperson of the ministry noted that they are aware of the difficult economic situation which affects fuel consumers.
Therefore, it will continue to make all possible interventions, to always ensure domestic oil market stability. With reopening of the Chinese economy, the global oil demand is predicted to rise, to at least 101 .7 million barrels per day, and many oil suppliers will be capitalising on that by offsetting higher demand through higher prices.
Meanwhile, the market is also said to be bracing itself for new shocks due to the introduction of the European Union’s embargo on Russian oil.
In theory, the EU embargo is expected to contribute to further increases in oil prices due to scarcity. Therefore, the oil market finds itself in a situation where demand is rising at an unprecedented pace while supply constraints remain.
Adding that there is so many uncertainties surrounding oil demand and supply, which is expected to continue influencing oil prices in unexpected ways.