Motorists in for a bloodletting

FUEL prices in Namibia are expected to rise sharply in the next three years, irrespective of the influence of the usual culprits – international oil producers and currency fluctuations.

Levies on petrol and diesel – a significant part of the total price per litre at filling stations – could increase by as much as 60 per cent because the Road Fund Administration (RFA) received backing this week from the main players in the motor vehicle transportation sector to raise these surcharges. The RFA proposal was supported at a half-day conference held on Monday where it presented its five-year business plan to representatives of Government agencies, municipalities, the construction industry and the Automobile Association.The RFA collects most of its funds from the fuel levies and then spends the money on the construction and maintenance of the country’s road network.About 80 per cent of the fuel levies go to the Roads Authority.The imminent drastic increase in petrol and diesel levies will magnify the costs of car ownership and driving with similar increases in a variety of other charges that will hit vehicle owners over the next five years, with some costs effectively doubling.The fund has argued that without a sharp rise in fuel levies, it will be unable to raise enough revenue to pay for the upkeep of existing roads and the construction of new ones.The urgency of an increase in fuel levies has been driven home by the Government’s announcement that its subsidy for the maintenance of roads will decrease substantially in the future.The RFA said the drastic increases were necessary since the parastatal’s attempts to raise the fuel levies “gradually” proved unsuccessful.”It must be noted here that, unless the required increases are implemented, Government’s policies of full cost recovery from road users and the achievement of economic efficiency in the transport sector, as entrenched in the RFA Act, will become unsustainable,” the RFA said in its draft business plan presented at the conference.Diesel levies were last increased to 73 cents a litre at the beginning of 2003 along with petrol charges, which had remained, unchanged since 2001.The RFA said that “an increase of 20 per cent in July 2004 has become unavoidable, if the fund is to continue financing capital projects and making a contribution towards the cost of traffic law enforcement.”Next year the RFA proposes a 25 per cent increase and 15 per cent the year after, dropping to two per cent by 2007.Vehicle license fees are also expected to go up by at least 60 per cent in the next three years, while new “mass-distance charges” are to be implemented this year.An official from the Ministry of Mines and Energy, which is responsible for setting fuel prices, said at the conference that the RFA and its “stakeholders” should remember that other organisations, such as the Motor Vehicle Accident fund, also depended on fuel levies.He was cautioning the RFA not to expect too much.RFA Chief Executive Officer Shakespeare Masiza said he was happy that representatives of various organisations understood they had little choice but to increase fuel levies.Other road user charges were unlikely to raise the required revenue without going for unrealistically high increases.The RFA proposal was supported at a half-day conference held on Monday where it presented its five-year business plan to representatives of Government agencies, municipalities, the construction industry and the Automobile Association.The RFA collects most of its funds from the fuel levies and then spends the money on the construction and maintenance of the country’s road network.About 80 per cent of the fuel levies go to the Roads Authority.The imminent drastic increase in petrol and diesel levies will magnify the costs of car ownership and driving with similar increases in a variety of other charges that will hit vehicle owners over the next five years, with some costs effectively doubling.The fund has argued that without a sharp rise in fuel levies, it will be unable to raise enough revenue to pay for the upkeep of existing roads and the construction of new ones.The urgency of an increase in fuel levies has been driven home by the Government’s announcement that its subsidy for the maintenance of roads will decrease substantially in the future.The RFA said the drastic increases were necessary since the parastatal’s attempts to raise the fuel levies “gradually” proved unsuccessful.”It must be noted here that, unless the required increases are implemented, Government’s policies of full cost recovery from road users and the achievement of economic efficiency in the transport sector, as entrenched in the RFA Act, will become unsustainable,” the RFA said in its draft business plan presented at the conference.Diesel levies were last increased to 73 cents a litre at the beginning of 2003 along with petrol charges, which had remained, unchanged since 2001.The RFA said that “an increase of 20 per cent in July 2004 has become unavoidable, if the fund is to continue financing capital projects and making a contribution towards the cost of traffic law enforcement.”Next year the RFA proposes a 25 per cent increase and 15 per cent the year after, dropping to two per cent by 2007.Vehicle license fees are also expected to go up by at least 60 per cent in the next three years, while new “mass-distance charges” are to be implemented this year.An official from the Ministry of Mines and Energy, which is responsible for setting fuel prices, said at the conference that the RFA and its “stakeholders” should remember that other organisations, such as the Motor Vehicle Accident fund, also depended on fuel levies.He was cautioning the RFA not to expect too much.RFA Chief Executive Officer Shakespeare Masiza said he was happy that representatives of various organisations understood they had little choice but to increase fuel levies.Other road user charges were unlikely to raise the required revenue without going for unrealistically high increases.