WINDHOEK – The Ministry of Mines and Energy has confirmed that fuel pump prices for October will remain unchanged. This means that fuel pump prices at Walvis Bay will remain at N$13.05 per litre for 95 Octane Unleaded Petrol and at NS13.63 per litre for Diesel 50ppm. According to a statement from Mines and Energy Minister Tom Alweendo, the 2017 Petroleum Activities Return (PAR) report indicates that oil companies are failing to generate sufficient returns on their investments in the petroleum sector.
The ministry has thus adjusted oil company margins to a level that would encourage sustainability and further investment is required. The ministry has, therefore, decided to increase the Industry Margin by 3 c/l from 93 c/l to 96 c/l on all the price regulated fuel products, of which the effective date is October 02, 2019.
The average exchange rate improved slightly in favour of Namibia, dropping to an average of N$14.9/US$ for September from a final average of N$15.2/US$ in August. The end results are moderate under-recoveries recorded on fuel pump prices.
Under-recoveries per product on the Basic Fuel Price (BFP) import parity landed in Walvis Bay as calculated at September 24, 2019, were 34.715 c/e for 95 Octane Unleaded Petrol and 32.358 c/e for Diesel 50ppm.
“Traditionally, under-recoveries call for equivalent increases in local fuel pump prices. However, the National Energy Fund, which absorbs under-recoveries on behalf of consumers from time to time, is in a stable financial position and will, thus, absorb the under-recoveries recorded during this month,” Alweendo stated.
Furthermore, Alweendo noted that the highlight of September 2019 in the global oil market was the attack on Saudi Arabian oil facilities.
“Initial fears that oil prices will drastically rise were quelled when the state oil producer Saudi Aramco announced that the facilities will be restored back to full capacity as soon as possible. The market volatilities contributed to measured increases in oil prices,” reads Alweendo’s statement. Refined oil traded at an average of US$72 and US$77 per barrel of petrol and diesel, respectively, in September 2019, in comparison to an average of US$69 and US$74 per barrel of petrol and diesel in August.