More fuel price increases inevitable

COMMUTERS should brace for yet another round of fuel price increases in the near future, as the world grapples with dwindling oil resources and soaring crude oil prices.

Government says there is only so much it can do to keep petrol and diesel affordable. Joseph Iita, Permanent Secretary of Mines and Energy, says there is simply no reassuring message for Namibians.”We cannot assure the public that fuel prices will not go up.What is happening on the world market is regrettably beyond our control, yet it has a serious impact on us,” he said.All the Government could do, he said, was to cushion the up-and-down fluctuations in oil prices with a subsidy to keep fuel prices relatively stable.Crude oil prices on the world market have risen beyond US$63 per barrel and are feared to hit new highs of US$70 in the near future.The bottom line is that the world’s oil reserves are running out and the commodity will get progressively more expensive until the wells finally run dry.A new study by scientists at Sweden’s University of Uppsala says the world’s oil reserves are up to 80 per cent less than predicted.Oil production levels will hit their maximum soon after 2010, the Swedish geologists say in the New Scientist magazine.At that point, prices for petrol and other fuels will reach disastrous levels, they predict.Earlier studies have predicted oil supplies will not start falling until 2050.The Uppsala team says the amount of oil and gas left is the equivalent of around 3 500 billion barrels of oil.The other factor influencing fuel prices in Namibia is the exchange rate of the Namibia dollar.At the moment the local currency is relatively strong against major international currencies, notably the US dollar.Conrad Wessels, a foreign currency dealer with Bank Windhoek, says a weaker US dollar is lessening the impact of higher world oil prices on Namibia.”We have been a bit lucky because the local currency has been trading stronger against the US dollar, hence the impact has not been felt as strongly.However, if the trend continues, the negative effects will certainly trickle down to the ordinary man,” Wessels said.Joseph Iita, Permanent Secretary of Mines and Energy, says there is simply no reassuring message for Namibians.”We cannot assure the public that fuel prices will not go up.What is happening on the world market is regrettably beyond our control, yet it has a serious impact on us,” he said.All the Government could do, he said, was to cushion the up-and-down fluctuations in oil prices with a subsidy to keep fuel prices relatively stable.Crude oil prices on the world market have risen beyond US$63 per barrel and are feared to hit new highs of US$70 in the near future.The bottom line is that the world’s oil reserves are running out and the commodity will get progressively more expensive until the wells finally run dry.A new study by scientists at Sweden’s University of Uppsala says the world’s oil reserves are up to 80 per cent less than predicted.Oil production levels will hit their maximum soon after 2010, the Swedish geologists say in the New Scientist magazine.At that point, prices for petrol and other fuels will reach disastrous levels, they predict.Earlier studies have predicted oil supplies will not start falling until 2050.The Uppsala team says the amount of oil and gas left is the equivalent of around 3 500 billion barrels of oil.The other factor influencing fuel prices in Namibia is the exchange rate of the Namibia dollar.At the moment the local currency is relatively strong against major international currencies, notably the US dollar.Conrad Wessels, a foreign currency dealer with Bank Windhoek, says a weaker US dollar is lessening the impact of higher world oil prices on Namibia.”We have been a bit lucky because the local currency has been trading stronger against the US dollar, hence the impact has not been felt as strongly.However, if the trend continues, the negative effects will certainly trickle down to the ordinary man,” Wessels said.