By: Nghiinomenwa-vali Hangala
The National Energy Fund, which held substantial surplus funds, is currently almost exhausted.
Going from the ability to absorb the under-recoveries and the premiums charged on top of the Basic Fuel Price, to safeguard our security of fuel supply.
This is according to Modestus Amutse, Minister of Industries, Mines, and Energy, on his update on the government’s Emergency Arrangements with Vitol for the supply of petroleum products for the period July to September 2026.
The geopolitical tensions in the Middle East broke out on 28 February 2026. Before that, the international oil market and Namibia’s local market were operating under normal conditions.
The outbreak of that conflict changed the dynamics of the oil market fundamentally, with serious consequences for the trade in petroleum products.
In Namibia, significant increases have been observed in pump prices, and the government has had to commit substantial resources – well over N$1 billion – to cushion our people and keep the economy stable.
“I want to emphasise that the welfare of the Namibian people is our priority, and it is a duty placed on us by our Constitution,” Amutse stated.
He noted that before the conflict, the National Energy Fund held a substantial surplus. However, things have changed, and the surplus is depleting.
He added that the country cannot allow the situation to go unchecked.
Amutse explained that most of the surplus has gone into absorbing the under-recoveries and the premiums charged on top of the Basic Fuel Price, in order to safeguard our security of fuel supply.
Over the past four years, premiums have been and continue to be charged on top of the Basic Fuel Price.
The country has, however, removed them as part of the strategy to reduce the burden on consumers.
The Minister has noted that the situation of high global fuel prices, the premiums on our fuel, together with a National Energy Fund that can no longer absorb high prices, would push pump prices sharply higher from the start of July.
“That increase would be felt in every household, in the cost of transport, food, and basic goods, a burden that will be felt most heavily by the most vulnerable among us,” the Minister noted.
As a result, the government’s proactive effort is to protect the interests and welfare of our people, says the Minister.
The Ministry has updated that the offer from Vitol to meet the country’s fuel requirement in full was more convincing.
He explained that fuel is supplied at the Basic Fuel Price, with no premium added on top and no public money required.
While other offers carried conditions, such as guarantees or financial assurances.
Amutse stated that the arrangements to secure fuel supply were through supply High Commissions and Embassies in Windhoek and through special representatives, as well as local and international oil companies, in order to secure affordable fuel free of the additional premiums.
At the same time, he also noted that the local industry was consulted on several occasions through the Namibian Oil Industry Association, where the Ministry set out its intention to consolidate national fuel requirements.
Amutse also updated that the Ministry is finalising the Bulk Petroleum Import Coordination Regulations, which are at an advanced stage.
These Regulations will enable the Government to take full coordination of the importation of all petroleum products into Namibia, a reform that the local industry itself agreed to, by consensus, as far back as 2023.
The arrangement now in place is a bridge to that system, which the Ministry intends to bring into operation by the end of September 2026, and which will deliver lasting efficiency and the greatest benefit to the nation.
A similar system operates successfully in the United Republic of Tanzania, which we have studied closely.
Amutse said that if conditions in the international oil market do not improve, the Government will issue a further round of invitations to suppliers to take part in this initiative, which is aimed squarely at stabilising our economy and protecting the welfare of our people
erastus@thevillager.com.na
