Motorists suffer yet another fuel increase
More pressure has been put on motorists as the mines ministry announced yet another fuel increase of N$0.50 per litre for petrol and diesel countrywide with effect from this coming Wednesday midnight.
Consumers are concerned about whether this is going to instigate an immediate call for taxi-fares to go up again.
National Chairperson of the Namibia Bus and Taxi Association, Pendapala Nakathingo said it is not going to be that fast.
“It has everything to do with national interest. Every increment that was announced by the government but we have to determine various factors that can lead us to determine the increment.”
“So of course we take note of the increase and we still keep on watching. We urge our operators and consumers not to panic but to keep calm. We will pronounce ourselves at a later stage,” he said.
Petrol prices will be 15.4% higher than at the beginning of the year and 24.7% higher compared to October 2017.
The increases amount to 17.8% and 29.5% respectively for diesel 50ppm.
The steep increase in the cost of landing refined oil at Walvis Bay resulted in under-recoveries.
This means the actual cost of oil exceeded the pump price at Namibian service stations, said the Economic Association of Namibia’s (EAN) economist, Klaus Schade.
The under-recoveries amounted to N$131.505 cents per litre for petrol and N$144.494 per litre for diesel 50ppm.
These are the largest under-recoveries so far this year, bringing total under-recoveries to N$440.507 cents per litre and N$418.879 cents per litre for petrol and diesel 50ppm respectively since May 2018.
Experts have reasoned that two factors continue to contribute to the upward price pressure, which are the depreciation of the Namibia dollar against the US dollar and rising global oil prices.
Schade said oil prices have exceeded US$80.00 per barrel towards the end of September, despite pressure by the US administration in particular through Saudi Arabia on OPEC to increase output in order to prevent prices to rise further.
Said Schade, “While Namibians are facing the highest petrol and diesel prices so far, they are still below prices in South Africa. South Africans have to pay R15.49 per litre at the coast and R16.08 per litre in Gauteng for petrol.”
He added that the strong price increases on the global market and the domestic market put substantial pressure on businesses due to cost increases and on consumers that have to spend more on fuel, unless they change their behaviour, and have therefore less disposable income.
“There are already concerns globally that the pace of oil price increases could result in a significant slow-down of the global economy since both producers and consumers have little time to adjust production and consumption to these hikes.”
“As in the past months, the fuel price increase will push transport inflation higher into double-digit figures, which will ultimately contribute to rising inflation rates. Motorists need to explore ways to use transport equipment more efficiently in order to cushion against rising costs of transport,” said the expert.