By: Nghiinomenwa-vali Hangala
Namibia has recorded one of the highest fuel under-recoveries for April, on two main fuels, forcing the government to step in to cover the difference with N$500 million.
The Ministry of Industries, Mines, and Energy (MIME) made this announcement last week during an update on the country’s fuel supply security.
The Namibian government has followed other governments currently taking various measures to cushion their economies from oil and fuel supply shocks caused by the USA and Israel attacks on Iran.
Iran controls one of the critical points in maritime sections of the world, the Strait of Hormuz, which is used to transport about 20% of the world’s crude and refined petroleum products.
Fuel under-recovery is a situation where fuel prices in the country/domestic market are lower than the cost of importing it, making it less attractive for fuel importers. To rectify the situation, government adjusts prices upwards in line with international prices or subsidises the difference to cushion consumers.
However, for April 2026, the under-recovery calculated by MIME is reportedly so impactful that the government will resort to withholding certain levies for the next 3 months.
Diesel has recorded the highest price under-recovery, with the difference between domestic prices and international markets standing at 129.53 cents per litre for the 50ppm and 1285.44 cents for the 10ppm.
As for petroleum ULP95, it has recorded an under-recovery of 602.99 cents per litre.
The government has pushed some of the under-recovery to consumers by making some of the highest fuel adjustments (usually prices go up by cents), with both diesel grades to increase by N$4 per litre and petrol increasing by N$2.50 per litre.
Through the National Energy Fund (NEF), the government will absorb the remaining difference, which will cost an estimated N$500 million for April 2026 alone.
Furthermore, MIME indicated that more volatility is expected as the situation continues in the Middle East. As a result, the ministry will suspend half of the levies imposed on fuel prices paid by consumers at the pump.
The International Energy Agency (IEA) has recommended that consumers worldwide reduce their energy consumption as a result of the current oil shock caused by the ongoing conflict. This is expected to help people tackle their rising energy bills, stated the IEA.
Meanwhile, several governments are enforcing energy restrictions and measures to mitigate the risk of shortages, given the undetermined duration of the conflict.
The U.S.-Israeli attack on Iran has caused the biggest oil disruption in history, according to an analysis by consulting firm Rapidan Energy. A significant proportion of the world’s oil supply has been disrupted for weeks on end due to the closure of the Strait of Hormuz – a key trade corridor connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea.
It has been reported that the IEA has ordered the largest release of government oil reserves in its history to help subdue prices. The oil releases address the supply issue, while the new recommendations to curb energy consumption are aimed at reducing demand to ease the impact of the disruption.
In Southeast Asia, several governments have already introduced said measures to mitigate the effects of the shortages.
In Thailand, people have been encouraged to reduce their use of air conditioning, while in the Philippines, many government workers now only work four days a week. Similarly, in Vietnam employers have been encouraged to allow staff to work from home.
Much of Asia heavily depends on the Middle East for its oil, a lot of which passes through the Strait of Hormuz. The Philippines, for example, depends on the Gulf for 90 percent of its oil needs.
erastus@thevillager.com.na
