Wednesday , April 24 2024

Ministry defends fuel price hikes

The Ministry of Mines and Energy has stated that the price of petrol would increase by N$2.50 per litre, while the price of diesel will increase by N$1.50 per litre, effective June 1.

This means that across the country, the new fuel price will be N$20.40 per litre and N$21.43 per litre for diesel.

The price hikes, according to Deputy Minister Kornelia Shilunga, are necessary due to the volatility in the worldwide oil market.

“The Ministry is fully aware that the public is under a lot of financial pressure as far as the price of fuel is concerned. The Ministry would like to remind the public that Namibia is a price-taker in the international oil market. It is therefore important to understand that the government is only indirect control at the levels of the domestic levies, taxes, and margins regarding the price of fuel,”

Global Gasoline and diesel prices are increasing to record highs and do not show any sign of dropping. One of the reasons for this situation is that global refining capacity has fallen significantly since 2020 due to the Covid-19 pandemic.

Another reason is that world demand for oil has been picking up immensely following the worst of the pandemic, but the global oil supply is still failing to catch up. Oil markets are also leaning towards an upward pricing trend as a pending import ban by the EU on Russian crude is expected to further tighten global supply.

“The EU has proposed a new package of sanctions against Russia due to the events in Ukraine, including a total ban on oil imports in six months, but the measures have not yet been adopted. These sorts of announcements are only serving to further stoke fears of an oil supply crisis in the global oil market,” Shilunga stressed.

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