Revolutionise Namcor Fuel Levy

Josepg Sheehama

MINISTER OF MINES and energy Tom Alweendo has revealed the government’s plans to cancel the levy of the National Petroleum Corporation of Namibia (Namcor) by taking steps to remove the fuel levy and creating a wider range of discounted offerings at pumps

Namcor’s estimated levy was 7,6 cents per litre of fuel sold in Namibia before it was cut to 3,8 cents per litre to ease the burden on the consumer.

This levy has been replaced with a viable alternative source of income – that of retail outlets at places such as Windhoek and Otavi.

I applaud the government for this positive development.

Fuel pump prices have an effect on the cost of living as fuel drives the economy of any nation, and should therefore be readily available at affordable prices.

With the Russia-Ukraine conflict continuing to impact the price of crude oil globally, this has had a direct impact on fuel prices in Namibia.

The plan to cancel the fuel levy is a manifestation of the government’s and stakeholders’ concerted efforts to revamp the economy through austerity measures as enshrined in the national development plans and the first and second Harambee Prosperity Plan.

On 21 September 2015 the Ministry of Mines and Energy’s website stated the following: “The fund was established in 1990 and its levies comprise an equalisation levy (petroleum levy charged at 73 cents per litre and 87 cents on petrol and diesel). The levy consists of a Namcor levy (7,6 cents per litre), a strategic oil storage levy (40 cents on petrol and 50 cents on diesel), a fuel marking levy (2 cents) and an electricity levy (1,08 c/kWh). It also subsidises the transporting of fuel to rural areas to ensure the equalisation of fuel prices countrywide.”

It is therefore commendable for the ministry to make this bold decision and reveal that the government is considering cancelling the Namcor levy.

With the pressure lifted by removing the levy on fuel, the economy would also have room to grow.

If coupled with the deregulation of the labour market and making other moves to improve the ease of doing business, the government may end up making even more money as more taxpayers enter higher levels of income across the board.

However, maintaining the Road Fund Administration levy at 74 cents and the Motor Vehicle Accident Fund levy at 37,72 cents is necessary as they are essential.

The biggest possible negative consequence of removing the fuel levy would be that Namcor would lose a huge source of revenue.

Namibia needs to abolish all fuel levies, as Namibians remain easy targets for revenue collection, although many are suffering as a result of increases in the price of fuel.

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