By: Dolly Menas
The ministry of mines and energy has asked fuel retailers in the country not to go on strike amidst the rise in tensions between the Fuel and Franchise Association of Namibia (FAFA), who threatened a nationwide shut down of all their services.
Ministry spokesperson Andreas Simon begged the retailers not to go on strike and to give it some time.
“Comes end the month, if we see that fuel prices have stabilised globally and the situation has improved, then we will increase the margins for them,” he said.
He argued that they do not want the country to have no fuel because retailers have gone on strike because a lot of sectors such as agriculture depend on it.
Earlier this week, the association and the ministry were locked in negotiations over their concerns.
Simon said that following the meeting with the fuel retailers, the fuel industry came through, explained and complained that they as an industry have not had any margin increase for the past three years.
Simon reported that the fuel industry said that they have a lot of things they need to pay, such as loans, and they have people they employ, and they need to pay their salaries, that is why they need to operate effectively.
“We did say that we do understand and listened further regarding the issues and to give a bit of history, previously an applicant for a retail site could just buy land, start constructing and come to the ministry to be issued a license,” Simon said.
“So far, what we have done in terms of reforming the law is looking at the requirements of which you first have to obtain a retail license from the ministry before constructing the site,” he said.
He said that even if one obtains a license, they also look at the proximity and the population of the certain area one wants to set up.
Simon emphasised that there is an issue of vertical integration, where the law states that if one has a wholesale site, they should do wholesaling and if one has a retail site, they should do retailing.
“The other concern was the illegal fuel importation of fuel, especially at the Angolan border. They said it is a concern to them because they are also retail sites at the border,” he said.
According to the ministry, the request for the retail margin increase has, however, come at a very bad time since it is the middle of the month, and they instead want to monitor what the global situation looks like; whether it will improve in terms of fuel prices and production race.
He further added that the ministry fears that if they grant the retailers the margin increase at the end of the month when they have to announce fuel prices based on what is going on in the global market, they might see a double increment.
“Whatever margin we need to increase, we have to pass it over to the consumers, and the consumer is the one that needs to go absorb that cost. We are trying to be a bit careful in just responding in terms of action to the request by the retailers,” Simon said.
According to him, the ministry has then asked the retailers to be patient up until they have done their reviews and see whether they can factor in the retail margin increase.
“We also did mention that vertical integration is an issue, and the government is not shying away from that. We are going to look and relook at what we can do and see whether they can change the requirements for wholesalers,” he added.
Simon also added that the ministry has minimal control over backing facilities and rates. He said they only regulate and determine the price of the fuel.
“Our response is that we understand that fuel is costly, but it is not unique just for Namibia. Fuel prices are high everywhere,”
Simon said that according to the law, an average person is allowed to have not more than 600 litres in their private capacity for storage purposes; however, it should be stored properly.
“You need to have a metal tank, and you should not use it to trade but necessary for storage only, and it should not be more than 600 litres, then you need to be licensed,” he said.
