The fuel supply agreement with Vitol saved the country between N$400 million and N$700 million over four months.
Industries, mines and energy minister Modestus Amutse announced the estimated savings from the deal with Vitol on Friday, while announcing October’s fuel prices.
In May, the minister said international oil trader Vitol would be granted the sole right to import all of Namibia’s fuel for the period of June to September.
The oil trader agreed to provide the fuel at a basic fuel price calculated by the government without additional premiums.
“We estimate that additional premiums on top of the basic fuel price for the period July to October 2026 were going to lead to a loss of about N$400 million to N$700 million at the macroeconomic level,” Amutse said on Friday.
At the time the deal was announced, he said the cost of fuel had skyrocketed in part because fuel importers were adding premiums to the price of each litre of fuel that they imported.
Organising a bulk fuel supply arrangement reduced those additional costs because Vitol agreed to supply fuel without a premium, he said.
“This is money the government has managed to keep in the pockets of Namibians through these emergency fuel supply arrangements,” Amutse said.
Vitol’s deal was extended through the month of October, after which TotalEnergies will take over as sole supplier for a period of three months.
Total was selected as the supplier during a competitive bidding process that involved four companies.
According to Amutse, all four companies did not demand premiums and offered a discount to the basic fuel price.
“Total emerged as the successful bidder with a weighted net discount of 63.85 cents per litre. In monetary terms, this amounts to a saving of approximately N$220.5 million at the macroeconomic level,” Amutse said.
However, the minister cautioned against optimism that the new deal means fuel prices will fall next month.
If oil prices continue to rise, the cost of importing fuel to the country will also rise. The discount will be applied to the higher oil price.
“Namibia is a net importer of all petroleum products and has limited control over the movements in international oil market prices,” Amutse said.
