Cost pressure for Namibia’s key import market

Fuel prices in Namibia’s key import market South Africa increased significantly in October. Fin24 reported that unleaded petrol price (95) increased by R1.14 a litre, while 93 increased by R1.08. Diesel (0.05% sulphur) jumped by R1.96 a litre, while 0.005% sulphur rose by R1.96.A litre of 95 unleaded petrol now costs R25.68 in Gauteng, while the wholesale price of diesel in Gauteng costs R25.01 a litre, a new high for 2023. In July 2022, diesel reached a record high of R25.40.Similarly, the ministry of mines and energy in Namibia announced a hike in fuel prices. Petrol prices for ULP95 increased by N$1.90, while diesel prices for 50ppm and 10ppm jumped by N$2.40.In Walvis Bay, the price of petrol is now N$22.88 per litre, while diesel 50ppm costs N$23.15. Diesel 10ppm costs N$23.35 per litre.According to the Namibia Statistics Agency (NSA), the domestic import bill during August stood at N$12.3 billion, reflecting an increase of 3.0% month-on-month and 2.2% year-on-year.The top five import markets for the country accounted for 58.6% of the import bill. South Africa occupied the first position with a share of 36.1%.The top five commodities imported into Namibia jointly accounted for 36.1% of total imports. Petroleum oils topped the list of imported goods, followed by motor vehicles. Petroleum oils were mostly sourced from Saudi Arabia, Oman and United Arab Emirates, while motor vehicles for the transport of goods were mainly sourced from South Africa and Finland.South African fuel prices are determined mainly by international oil costs and the rand-dollar exchange rate, as oil is priced in dollars.The main reasons behind the increase were crude oil prices, which jumped from US$87.78 to US$91.86 in the period, refinery shutdowns in the US, global diesel shortages, and the rand's depreciation against the dollar, from R18.67 to R19. Looking at inflation, South Africa recorded a rate of 4.8% in August, according to Stats SA. Inflation in Namibia stood at 4.7% in August. The Bank of Namibia (BoN) projects inflation to average 5.6% in 2023.Real gross domestic product (GDP) growth is projected to moderate downwards to 3.3% in 2023, from 4.6% registered in 2022.Risks to domestic growth are predominantly in the form of ongoing monetary policy tightening globally and costs of key import items that are likely to remain high for the entire forecast period. -phillep@nmh.com.na

Cost pressure for Namibia’s key import market

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Cost pressure for Namibia’s key import market

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