…As It Suspends Issuing New Licences
By: Hertha Ekandjo
The mushrooming of oil retailers or service stations has forced the mines and energy ministry to suspend applications for new oil retail sites and wholesale licenses nationwide.
On Thursday, the ministry notified the public that it will no longer be issuing oil retailing licenses until further notice.
The ministry’s public relations officer Simon Andreas told The Villager that the ministry has noticed a rapid growth in the number of fuel service stations which has an impact on the increase of fuel prices.
“We have seen that there is that huge saturation retail sites across the country, that situation has created a problem such that automatically it will lead to high fuel prices in the country. We have the concern that we have a huge growth in terms of retail sites, and not just the sites that are already active but new applications as well,” said Andreas.
Vivo Energy Namibia, TotalEnergies, Engen and Puma Namibia have approximately 166 service stations across the country.
Andreas further mentioned that the ministry has the mandate to ensure that there is a security of fuel supply into the country and that all wholesalers and retailers operate under their laws, meaning that they should be licensed.
According to Andreas, they had an open licensing system where the law holds the mines ministry accountable when issuing licenses.
“Retailers have been crying for an increase in the retail margin, which they have gotten now. The moment you increase the retail margin or the dealer margin, that means that that money should come from somewhere, which is the consumer. That would only mean that money should be added to the fuel price,” Andreas explained.
Furthermore, he noted that the more retail outlets there are in the country, the more the people will need to benefit from that retail margin.
Andreas further said that if many people have to benefit from the fuel margin, that would mean that the ministry has to increase fuel prices in order to increase the fuel margin.
“In a certain given area, you find that there are three or four fuel stations, which are not even 30 meters away from each other. This is too much for an area depending on the size and the population. Thus, we decided to put a stop to the issue of licensing,” Andreas noted.
He added that if one has to apply for an oil retailer license, it should be in a meaningful area where fair competition could be created. “At least in an area without a filling station.”
Moreover, he highlighted that many areas become overcrowded with filling stations, creating unfair competition.
According to him, they would only start issuing licenses when they notice a great growth in the demand for fuel stations.
According to the ministry, this moratorium would affect all, including the National Petroleum Corporation of Namibia (Namcor), which in recent years entered the fuel station market with plans to expand further.
Thus far, the national oil company has nine service stations across the country and, as of last year, had several sites that were under construction.
When approached for comment on how this would affect Namcor’s business strategy, managing director, Immanuel Mulunga said he could not comment.
“I wouldn’t want to comment on that since we’ve been in ongoing discussions with MME on this topic. Whatever I say might prejudice Namcor’s standing with the ministry,” he replied.
