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Why Namibia has left Angolan oil for India

By: Hertha Ekandjo

Neighbouring Angola cannot supply Namibia with fuel as many have been suggesting, as the country only refines 30 per cent of its fuel locally, and the rest is done outside its borders

This was revealed by the mines and energy ministry`s senior public relations officer (PRO), Andreas Simon, earlier Friday while discussing the matter with The Villager.

“Angola produces crude oil and refines only 30 per cent of the oil. Do you think they will be able to give Namibia as well? They can`t because 70 per cent of what they produce goes outside to be refined and gets resold back to them anyways.” he expressed.

Furthermore, Simon said the reason why fuel is cheaper in Angola was that their government receives tax and royalties they get from producers as shareholders.

He added that the Angolan government heavily subsidises Angolan oil, that being the reason why Angolan fuel is affordable.

According to the PRO, subsidies given to Angolans by their government are only meant for the Angolan market and not for any other country.

“If we are to go into understandings with Angola, I am sure that is business by the end of the day. They might not even sell it. I am sure that they want to make money, and they want to make profits. Huge chances are that they might even sell it to us at market price, so what is the point anyway?” Simon questions.

Simon emphasised that the energy ministry did not exclude Angola, but instead, they are still looking at the possibility of proposals, and only when Angola is ready to share its fuel, only then will they see how to go about it.

Moreover, he states that the reason why they considered India was because of the quality of their fuel.

Simon narrated that since the government was not in the business of buying fuel, so when suppliers came, they flipped it over to local buyers to see who would take up proposals from new suppliers.

He added that the fact Namibia is in agreement with India on oil importation won`t bring trouble from its current suppliers.

“People who can take up that risk are business people when their credit looks good with the bank and have done this before,” said Simon.

He further emphasised that the current furl situation was bad, and the government could not be seen sitting quietly and just relying on the fuel industry.

According to the energy ministry, the reason why they are trying to reach an agreement with India was because that would make fuel cheaper in Namibia.

“So that we can get to a point where we will be able to reduce fuel prices in our country,” he explained.

All along Namibia was banking on its good bi-lateral relations with India to secure an alternative source for its fuel requirements.

The government had, over the past few months, been desperately looking for an alternative solution to high fuel prices after energy may in May 2022 implemented fuel levy relief measures for three months to cushion local consumers.

The petroleum industry in India dates back to 1889, when the first oil deposits in the country were discovered near the town of Digboi in the state of Assam.

The natural gas industry in India began in the 1960s with the discovery of gas fields in Assam and Maharashtra (Mumbai High Field).

As of the  31st of March 2018, India had estimated crude oil reserves of 594.49 million metric tonnes (Mt) and natural gas reserves of 1339.57 billion cubic metres of natural gas (BCM).

Reports have shown that India imports 82% of its oil needs and aims to bring that down to 67% by 2022 by replacing it with local exploration, renewable energy and indigenous ethanol fuel. India was the second top net crude oil (including crude oil products) importer of 205.3 Mt in 2019.

According to research, by March 2021, India’s domestic crude oil production output fell by 5.2% and natural gas production by 8.1% in the FY21 as producers extracted 30.4917 Mt of crude oil and 28.67 BCM of natural gas in the fiscal year.

In August 2021, crude oil production decreased by 2.3%, but there was a 20.23% increase in home-grown natural gas.

Hertha Ekandjo

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