As of June 3, 2015 Petrol prices will increase to N$10.59 per litre from May’s N$10.39 per litre. This is a retail price increase of 20 cents per litre for 95 Octane Unleaded petrol.
Meanwhile, it will cost a customer using a diesel car N$10.62 per litre for 500 parts-per-million (PPM) whereas the Diesel 50ppm will cost a customer N$10.62 per litre. For both it was an increase from N$10.32 and N$10.42 respectively.
Similar to petrol prices, all Diesel all grades increased by 20 c/l for the wholesale price.
The under-recoveries per product on the Basic Fuel Price (BFP) import parity landed in Walvis Bay calculated indicated that 95 Octane Unleaded Petrol was 43.779 cents per litre (c/ℓ), while Diesel for 500ppm stood at 39.454 c/ℓ and Diesel for 50ppm is31.69 c/ℓ.
Chief Public Relations Officer at the Ministry of Mines and Energy (MME), Teopolina Hasheela said Petrol and diesel pump prices at various inland destinations countrywide will also be adjusted accordingly.
Hasheela affirmed that the petrol and diesel pump prices for June 2015 will increase at 00h01 on Wednesday, the 3rd June 2015.
“Due to a relatively strong exchange rate and a sharp increase in freight rates, the BFP unit rate slate for May 2015 recorded lower unit rate under-recoveries for all the fuel products in comparison to the figures recorded for the previous month,” Hasheela said.
She said that last month, the average exchange rate was N$12.0267 for every US$ in comparison to N$11.9341 this month for a single US$.
“This explains the improvement in the unit rate under-recoveries,” she added.
However, Hasheela further explained that the BFP failed to record any unit rate over-recoveries for any fuel product due to a sharp increase of US$12.7000 in the average freight rates since the last fuel price review took place last month.
Hasheela added that despite the fact that Namibian fuel pump prices continue to be pushed upwards by a strong exchange rate and other escalating import related cost components such as freight rates, the prices of crude oil throughout global markets continue to fall due to a continuous oversupply of the product.
“This is where the international fuel market needs to strike a balance to stabilize pump prices,” Hasheela added.
In addition, Iraq is taking the Organization of the Petroleum Exporting Countries’ (OPEC) strategy to defend its share of the global oil market to a new level.
Hasheela explained that the nation plans to boost crude exports by about 26% to a record 3.75 million barrels a day next month, according to shipping programs, signalling an escalation of OPEC strategy to undercut U.S. shale drillers in the current market rout.
“The additional Iraqi oil is equal to about 800,000 barrels a day, or more than what comes from OPEC member Qatar. The rest of the Organization of Petroleum Exporting Countries are expected to rubber stamp its policy to maintain output levels. For the consumer, the future looks bright in terms of lower oil prices due to oversupply,” Hasheela explained.