Photo: Contributed
By: Staff Reporter
Every month, the Ministry of Mines cites shipping cost as part of the factors driving the cost of domestic fuel; however, the government has not provided a medium or long term plan to reduce the exposure.
According to the latest ministerial updates on fuel prices for November 2026, the government has to pay N$471.6 million to cover under-recovery (price differences) to oil companies for October and November 2026.
However, not all of the country has paid this year to cover fuel prices, as shipping costs and oil prices started increasing last year.
Moreover, the Ministry has indicated that it has only N$416 million remaining on the National Energy Fund for price equalization purposes.
The country also had to find other suppliers, such as Nigeria as Middle East sources couldn’t ship their oildue to USA attacks on Iran, which disrupted maritime.
This amount is below the N$800 million buffer theMinistry set aside to cover at least three months of under-recovery, the Ministry of Industrialisation and Mines revealed.
Despite all the shocks, depleting buffers, and the country having to go into different arrangements with oil, the Ministry has not announced any medium- to long-term supply solutions to cushion the country from future shocks.
The country has invested in coastal oil storage, which the public has been told was meant to stabilize prices and cushion the domestic market from international oil shocks, as it can store fuel for 3 months.
However, for the whole of this year, the Ministry has not mentioned how the fuel strategy is playing a role in stabilizing prices.
It has been only the NEF that has been utilized, or the burden pushed to consumers.
Beyond the coastal storage, there has also been news that Angola has offered Namibia and Zambia the opportunity to buy a stake in the Lobito Refinery, which it is developing to increase its capacity to supply the region.
For over two years, the Namibian government has not pronounced itself on whether it will buy a stake or not.
According to news from Angola, the offer was also repeated when Namibia took a trade visit to Angola.
Moreover, the country is also preparing a fiscal package for developers to start developing offshore oil wells that can also position the country as a crude producer.
However, the state has not announced any plans for future refining, given that crude production will not translate into low pump prices as the country still has to import refined products.
The USA has also worsened the oil prices outlook, with its potential further attacks on Iran after its election.
The situation is expected to push up international oil prices and complicate supply dynamics affecting shipping costs, which affect pump prices.
With the Ministry buffer depleted, the sustainability of government intervention is also at risk.
