Charge a fuel levy for Kerosene- Government advised

Government could maximize more benefits if it considers treating Kerosene like other controlled petroleum products and charge a fuel levy, which would contribute to the National Energy Fund, the Economic Association of Namibia (EAN) has advised. 

The advice comes right in the wake of the country having experienced another fuel price hike which increased by N$0.25 per liter for petrol and diesel with effect from the 1st of August.

The EAN has said Kerosene is excluded from the petroleum levy while travelers using public transport or their own cars to go to Walvis Bay, Ondangwa, Cape Town or elsewhere contribute to the National Energy Fund, which is not the same for those flying to the same destination.

“The exclusion of Kerosene from the fuel levy amounts therefore to an indirect subsidisation of air travelling,” said economist Klaus Schade.

His reasoning is that since air transport is mainly used by the better off, government could consider treating Kerosene like other controlled petroleum products and charge a fuel levy, which would contribute to the National Energy Fund.

 In light of the rising fuel costs, Schade said if these last longer periods of time, it should therefore lead to the use of more fuel-efficient equipment, more efficient use of transport equipment (car-pooling, better trip planning), a shift to non-motorised modes of transport for shorter distances (walking, cycling) and eventually the move to other forms of ‘fuel’ than oil products.

“Electric vehicles and vehicles running on hydrogen are on the rise globally. Some countries have already set deadlines for the phasing out of combustion engines by the year 2040.”

“Namibia has the chance to be the first major mover on the African continent to support a major shift to e-vehicles including e-scooter, e- bikes etc. that are well suited for relatively short daily trips in urban areas.”

“They can be re-charged during working hours, lunch breaks or at home during night. Namibia is endowed with renewable energy sources to recharge the batteries. Since the country is also endowed with lithium, it should be explored whether it is not viable to produce lithium-ion batteries that power e-vehicles,” he elaborated. 

He warned that the continuous subsidisation of fuel could delay necessary adjustments in transport behaviour and as such, government could therefore consider to use the NEF to fund investment necessary to support the shift to e-vehicles and or hydrogen, such as recharging stations at public places.

“Furthermore, since the Act stipulates that the Fund can be used for research, more resources should be made available for research into more sustainable forms of transport and transport equipment, such as the e-taxi developed by the Namibia University of Science and Technology.”

“Hence, rising fuel prices provide the opportunity to chart the way forward for an environmentally-friendly and sustainable transport sector. Not least, this will support Namibia’s efforts to achieve the Agenda 2030, the Sustainable Development Goals, in particular SDG 13 that aims at combatting climate change,” he added.