Relief for consumers after 8 fuel price hikes

PHILLEPUS UUSIKUFuel prices in Namibia will remain unchanged for the month of January 2022, the Ministry of Mines and Energy (MME) has announced.The price of petrol in Walvis Bay, which is the port of entry, will remain at N$15.65 cents per litre (c/l), while the price of diesel will remain at N$15.58 c/l. This is great relief for consumers as fuel prices increased eight times in 2021. According to the ministry’s spokesperson, Andreas Simon, after successive months of surging global oil prices, the market is now relatively stable.Although still high, the average prices of refined petrol and diesel decreased by US$7 in December 2021, from an average of US$91 in November 2021 to an average of US$84 in December 2021. In addition, the local currency depreciated slightly against the United States (US) dollar, from an average of N$15.53 in November 2021 to an average of N$15.92.“Moreover, the December 2021 fuel price adjustment has brought our local pump prices on par with the international oil prices, hence slight over-recoveries are recorded during the month of December 2021,” Simon pointed out.Taking the above into consideration, the Ministry of Mines and Energy (MME) incurred an over-recovery during December 2021 of N$0.21 per litre on petrol and N$0.18 per litre on diesel. During 2021, the MME has incurred under-recoveries of N$8.73 per litre in total.According to Simonis Storm (SS), this means that local petrol prices would have increased from N$11.35 in January 2021 to N$20.08.However, the National Energy Fund (NEF) partially finances under-recoveries. The NEF has financed about 51% of under-recoveries experienced in 2021, which is of great assistance in alleviating inflationary pressures faced by consumers. The surplus gained by the over-recovery in December 2021 will be used to fund the NEF which in turn will be used to finance any future under-recoveries, SS added.OutlookYear to date, petroleum imports account for 9.5% of total imports on average and totalled N$97.1 million in import purchases. Petroleum imports edged lower towards September 2021, which is consistent with reduced electricity generation for the third quarter of 2021, SS pointed out.OPEC+ indicated in their November meeting that they see signs of oil surpluses building in December 2021. This has come to materialise as global oil markets returned to surplus according to the International Energy Agency (IEA) on 14 December 2021. Oversupply stems from sales from strategic reserves from different countries and record output in the US, Canada and Brazil.The IEA also notes that oversupply could increase further in the coming months, primarily due to the Omicron variant limiting international travel and therefore reduces its oil demand forecast by 600,000 barrels a day in the first few months of 2022. The group decided to keep their production levels unchanged at their latest meeting on 2 December 2021, as was largely expected, SS said.-phillep@nmh.com.na

Relief for consumers after 8 fuel price hikes

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Relief for consumers after 8 fuel price hikes

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