Cost pressure for Namibia’s key import market
Big fuel price hikes on the cards for SA
South Africa accounted for 37.8% of Namibia's N$11.9 billion import bill in July.
Big fuel price hikes are expected in South Africa, which is Namibia’s key import market. According to the Namibia Statistics Agency (NSA), the domestic import bill stood at N$11.9 billion in July. South Africa accounted for 37.8% of total imports.
Imports from South Africa were mainly driven by motor vehicles for the transport of goods and motor cars for the transport of persons, which occupied the third and fifth positions, respectively. Namibia also imports food items from South Africa.
Fin24 reported that based on the current oil and rand prices, the latest data from the Central Energy Fund (CEF) shows that diesel prices may be hiked by around R2 a litre in South Africa, depending on the grade. Petrol 95 and 93 unleaded could be increased by R1.23 a litre and R1.15c, respectively.
This will push fuel prices to levels last seen in July last year, the Automobile Association (AA) said.
However, there is still some time to go before the final prices are set. Fuel prices will only be adjusted on 4 October.
South African fuel prices are largely determined by international oil costs and the rand exchange rate, as oil is priced in dollars.
The CEF’s data is showing that in the case of petrol, up to 80% of the increase can be attributed to higher oil prices while these prices are responsible for up to 86% of the expected climb to the price of diesel, the AA said.
Brent oil
Brent oil is currently trading at around US$94 a barrel, from US$84 a month ago. The price of Brent crude oil has now climbed more than 30% since a recent low point in March. Saudi Arabia and Russia have cut their oil production, squeezing prices higher. Some analysts expect to see Brent to move above $100 a barrel soon.
The poorer rand/dollar exchange rate is contributing to the increases, but its impact, at the moment, is minimal compared to that of rising oil prices, it added. The rand has weakened from around R18.58/$ at the start of the month to R19/$ currently.
"The outlook is certainly bleak, although it has improved a little since the beginning of the month. With two more weeks before the official adjustment for October is made, South Africans will be hoping the downward trajectory continues. Although increases are now a certainty for October, the question will be by how much fuel prices will ultimately rise," said the AA.
This month, the price of petrol in South Africa increased by R1.71 a litre, while the price of diesel increased by a painful R2.84 a litre.
Similarly, in Namibia, the ministry of mines and energy this month announced an increase in petrol prices for ULP95 by N$1.20, while diesel prices for both 50ppm and 10ppm rose by N$1.70. -Additional Reporting by Fin24
Imports from South Africa were mainly driven by motor vehicles for the transport of goods and motor cars for the transport of persons, which occupied the third and fifth positions, respectively. Namibia also imports food items from South Africa.
Fin24 reported that based on the current oil and rand prices, the latest data from the Central Energy Fund (CEF) shows that diesel prices may be hiked by around R2 a litre in South Africa, depending on the grade. Petrol 95 and 93 unleaded could be increased by R1.23 a litre and R1.15c, respectively.
This will push fuel prices to levels last seen in July last year, the Automobile Association (AA) said.
However, there is still some time to go before the final prices are set. Fuel prices will only be adjusted on 4 October.
South African fuel prices are largely determined by international oil costs and the rand exchange rate, as oil is priced in dollars.
The CEF’s data is showing that in the case of petrol, up to 80% of the increase can be attributed to higher oil prices while these prices are responsible for up to 86% of the expected climb to the price of diesel, the AA said.
Brent oil
Brent oil is currently trading at around US$94 a barrel, from US$84 a month ago. The price of Brent crude oil has now climbed more than 30% since a recent low point in March. Saudi Arabia and Russia have cut their oil production, squeezing prices higher. Some analysts expect to see Brent to move above $100 a barrel soon.
The poorer rand/dollar exchange rate is contributing to the increases, but its impact, at the moment, is minimal compared to that of rising oil prices, it added. The rand has weakened from around R18.58/$ at the start of the month to R19/$ currently.
"The outlook is certainly bleak, although it has improved a little since the beginning of the month. With two more weeks before the official adjustment for October is made, South Africans will be hoping the downward trajectory continues. Although increases are now a certainty for October, the question will be by how much fuel prices will ultimately rise," said the AA.
This month, the price of petrol in South Africa increased by R1.71 a litre, while the price of diesel increased by a painful R2.84 a litre.
Similarly, in Namibia, the ministry of mines and energy this month announced an increase in petrol prices for ULP95 by N$1.20, while diesel prices for both 50ppm and 10ppm rose by N$1.70. -Additional Reporting by Fin24
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