June arrives with an increase of fuel prices

Fuel pump prices for June 2018 will increase at 00h01 on the sixth of June, the mines and energy minister, Tom Alweendo has said.

Fuel pump prices in Walvis Bay will increase as follows: 95 Octane Unleaded Petrol to increase by 60c/l, Diesel (all grades) to increase by 60c/l (wholesale).

Thus the new fuel pump prices in Walvis Bay will be: 95 Octane Unleaded Petrol, N$12.30/l, Diesel 500ppm, N$12.63/l, Diesel 50pm, N$12.68/l.

The over/under-recoveries per product on the BFP import parity landed in Walvis Bay calculated as at 25 May 2018 are indicated as: 95 Octane Unleaded Petrol (91.764) c/l, Diesel 500ppm (82.657), Diesel 50ppm (83.542) c/l.

The results of the latest fuel price review indicate that oil importers paid more than the prices set by the government to bring fuel products into the country, he said.

“The final figures recorded are way above the prices set by government and these pricing under-recoveries are huge enough to trigger upward adjustments in the local pump prices in order to create a balance between the government determined prices and the oil market determined prices,” he said.

Due to demand speculation by oil traders and due to OPEC’s continuing cuts of oil supply, the average free-on-board prices per barrel sharply increased for ULP 95 and for both diesel grades, a technical analyses of the basic-fuel price unite rate shows.

Barrel prices for refined oil traded at an average of US86.950 for UPL 95, US$88.732 and US$89.477 for diesel 500 ppm and diesel 50ppm respectively.

The basic fuel price unit rate slate calculations for the past month, therefore, recorded high under-recoveries on the prices of regulated petroleum products.

The average exchange rate was also volatile which culminated in a depression of the NAD and the US$.

The National Energy Fund will step in to absorb about more than 25% of the under-recoveries in order to offer partial relief to the consumers of the pumps.