The Ministry of Mines and Energy has announced a decrease in the price of diesel by 80 cents for May, while the petrol price is set to remain the same.
In an update, the Ministry said the price of diesel products now costs N$19.85 per litre, while the petrol price at Walvis Bay will remain unchanged at N$19.78 per litre.
This comes after the National Energy Fund is set to absorb the under-recoveries on behalf of fuel consumers to the tune of approximately N$24.8 million.
“The prices of crude oil dropped to about US$72 during March, resulting in OPEC+ introducing a cut in oil production of over 1 million barrels per day while Russia reduced oil production by half a million barrels per day,” Ministry’s Spokesperson Andreas Simon said on Friday.
“Although the existing OPEC+ cuts amount to nearly 2 million barrels per day, the total is now about 3.6 million barrels per day or 3.7 per cent of the total global oil demand. These cuts have sent crude oil prices to higher levels over Easter to US$87 per barrel.
“The US$80-90 per barrel range appears to be the preferred zone of OPEC. This increase in oil prices could spill into new inflation if prices go above US$90 per barrel and thereby contribute to more interest rate hikes, and again weaken energy demand. Geopolitical risk is still an issue with the Chinese military exercises near Taiwan and American forces in the same area,” Simon added.
Moreover, the Ministry’s calculations indicate that the average price of Unleaded Petrol in April has increased by about US$4, from US$99.81 per barrel at the end of March to US$103.656 per barrel in April.
On the other hand, the average price for diesel 50ppm over April 2023 has decreased by about US$4 per barrel over the review period, from US$101.249 per barrel at the end of March to US$97.803 per barrel in April.
The average price for diesel 10ppm has also decreased by US$4 from US$102.235 at the end of March to US$98.671 during the review period.
“Furthermore, the exchange rate figures for the period of 01-25 April 2023 indicate that the NAD has slightly appreciated against the USD at N$18.1372 per USD (compared to N$18.2573 per USD at the end of March 2023). Therefore, after entering the above input factors into the fuel pricing model, the Ministry recorded a combination of over and under-recoveries on petrol and both diesel products, namely an under-recovery of 95 cents per litre on petrol and over-recoveries of 111 and 101 cents per litre on diesel 50ppm and 10ppm, respectively,” Simon said.
The prices are to come into effect on the 3 May.
Last month the ministry resolved to introduce a new model for calculating the basic fuel price (BFP) or import parity price for all price-controlled petroleum products.
Namibia, according to data from the Ministry of Mines and Energy, consumes 90 million litres of fuel per month on average – 60 million litres of diesel and 30 million litres of petrol.
