Economist Omu Kakujaha-Matundu has applauded the Ministry of Mines and Energy’s decision to hold fuel prices steady.
He says the unchanged fuel prices will provide great relief.
This comes after the Ministry of Mines and Energy announced that fuel prices will remain unchanged for the month of June.
According to a statement issued by the ministry on Friday, the prices at Walvis Bay remain N$23 per litre for petrol, N$22,17 per litre for diesel 50 ppm and N$22,37 per litre for diesel 10 ppm.
Matundu said fuel prices impact everyone on all levels of the economy.
“Everyone in the economy is a fuel consumer in one way or another.”
“When fuel prices rise, the taxi driver has to choose between buying less bread for his family or paying for gas.”
Matundu further said commuters are forced into ramshackle taxis because they can’t afford the fuel surcharge.
He noted that car owners are not spared as they have to cut back on necessities to make ends meet.
“Even farmers are impacted, having to reduce productive activities due to rising fuel costs,” said Matundu.
Logistics companies are another crucial sector affected by fuel prices, he added.
“These cost increases translate to fuel inflation, which means more expensive bread and other essential goods on our shelves.”
The economist further highlighted the ripple effect on social safety nets.
“The working person has to cut back on sending money to unemployed relatives because their own budget is strained.
“While a fuel price hike may affect different income groups in varying degrees. The overall impact on the economy is always negative,” he said.
According to Matundu, the decision to hold prices is a positive step for Namibians across the board.
The ministry also recorded over-recoveries on both petrol and diesel products.
“The over-recoveries amount to 52,7 cents per litre on petrol, 86,10 cents per litre on diesel 50ppm, and 98,12 cents per litre on diesel 10ppm,” noted the statement.
The over-recoveries provide an opportunity for the ministry to rebuild a healthy balance of the national state account.
Economist Josef Sheehama, however, said the unchanged fuel prices do not provide much relief.
“We are happy with the leaders because prices remain unchanged but it is not a big relief because fuel increased last time and this had a negative effect on both the economy and consumers,” said Sheehama.
He added that in light of the elections taking place in South Africa, Namibia should brace itself for economic uncertainty as the currency is pegged.
“The rand will suffer if political parties’ threat of election is not appropriately managed. Due to the currency peg, the rand instability will affect the Namibian economy,” Sheehama added.
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