Petrol price relief may be on the cards next week

ANOTHER fuel price adjustment is on the horizon – but this time it may be good news for consumers still reeling after five increases since the beginning of the year.

Indications are that the Ministry of Mines and Energy will announce a decrease, or at least keep fuel prices unchanged because of what is described as an over-recovery in the local oil market. “There will definitely be no fuel increase at the next announcement,” a credible source in the fuel industry told The Namibian yesterday.This is the first time in two years that Namibia has experienced an over-recovery – consumers paying more for fuel than it costs to import it.Lower prices for petrol and diesel would come as a relief for Namibian consumers, who had to tighten their belts after being walloped with a 50-cent increase last month.The last hike saw Walvis Bay pump prices shooting up to N$6,44 per litre of unleaded petrol, N$6,42 per litre of lead-replacement petrol and N$6,50 per litre of diesel.The Namibian has learnt that petrol is now over-recovered by around 38 cents a litre, but that there is only a ‘very small’ over-recovery on the price of diesel.An over-recovery means a surplus resulting from the selling of fuel at a higher price than what it has been bought at.This, therefore, suggests that the retail fuel price can be lowered at the next monthly price adjustment.Retail fuel prices are reviewed monthly by the Ministry of Mines and Energy in accordance with the previous period’s average over- or under-recovery.Sources in the fuel industry said a statement was likely to be issued by the Minister of Mines and Energy, Erkki Nghimtina, by next week.Speculation of possible relief is rife after South Africa – from where Namibia imports nearly all its fuel – announced last week that fuel prices would go down in that country tomorrow.The SA Department of Minerals and Energy said petrol will go down by 36 cents per litre, while diesel 0,05% sulphur – the same type as that used in Namibia – will go down by 25 cents, while the cleaner diesel (0,005% sulphur) will be cut by 29 cents per litre.The Namibian’s source said Namibia would not necessarily follow South Africa, as fuel prices in that country have been higher than the pump prices in Namibia.He added, however, that there were many factors that the Ministry would take into account before making a decision on whether to slash prices or keep them the same – since the Government has also been paying towards lessening huge under-recovery costs in the past.The changing tide of fuel prices has been attributed to factors such as lower crude oil prices and the strengthening of the South African rand and Namibia dollar against major currencies.Oil prices, which were at a record high US$78 per barrel last month, have since waned to below US$70 and were reported at around US$69 per barrel yesterday.”There will definitely be no fuel increase at the next announcement,” a credible source in the fuel industry told The Namibian yesterday.This is the first time in two years that Namibia has experienced an over-recovery – consumers paying more for fuel than it costs to import it.Lower prices for petrol and diesel would come as a relief for Namibian consumers, who had to tighten their belts after being walloped with a 50-cent increase last month.The last hike saw Walvis Bay pump prices shooting up to N$6,44 per litre of unleaded petrol, N$6,42 per litre of lead-replacement petrol and N$6,50 per litre of diesel.The Namibian has learnt that petrol is now over-recovered by around 38 cents a litre, but that there is only a ‘very small’ over-recovery on the price of diesel.An over-recovery means a surplus resulting from the selling of fuel at a higher price than what it has been bought at.This, therefore, suggests that the retail fuel price can be lowered at the next monthly price adjustment. Retail fuel prices are reviewed monthly by the Ministry of Mines and Energy in accordance with the previous period’s average over- or under-recovery.Sources in the fuel industry said a statement was likely to be issued by the Minister of Mines and Energy, Erkki Nghimtina, by next week.Speculation of possible relief is rife after South Africa – from where Namibia imports nearly all its fuel – announced last week that fuel prices would go down in that country tomorrow.The SA Department of Minerals and Energy said petrol will go down by 36 cents per litre, while diesel 0,05% sulphur – the same type as that used in Namibia – will go down by 25 cents, while the cleaner diesel (0,005% sulphur) will be cut by 29 cents per litre.The Namibian’s source said Namibia would not necessarily follow South Africa, as fuel prices in that country have been higher than the pump prices in Namibia.He added, however, that there were many factors that the Ministry would take into account before making a decision on whether to slash prices or keep them the same – since the Government has also been paying towards lessening huge under-recovery costs in the past.The changing tide of fuel prices has been attributed to factors such as lower crude oil prices and the strengthening of the South African rand and Namibia dollar against major currencies.Oil prices, which were at a record high US$78 per barrel last month, have since waned to below US$70 and were reported at around US$69 per barrel yesterday.