- Prime Minister Hage Geingob announced this morning that recent oil exploration off the Walvis Bay coast has confirmed that the country has oil reserves, although not in commercial volumes.
Fuel prices drop as MVA Fund levy increases
Minister of Mines and Energy Isak Katali approved the Fund levy increase to two cents per litre on both petrol and diesel grades and at the same time the Ministry also increased the Namibian Energy Fund (NEF) by 5c per litre, to “enable the fund to full fill its obligation of financing the strategic fuel storage facility”.
The storage facility is a national project which, upon completion, will ensure the future security of oil supplies in the country during hard times.
These increases follow after numerous requests and pleading by the MVA Fund to the ministry to adjust their fund levy, but they have so far only been granted lower than expected increases and the fund struggles to meet its medical obligations.
Although welcoming the new levy increase, the MVA Fund says it is not yet sufficiently covered. According to Stephen Tjiuoro, MVA Fund Chief Corporate Affairs, the Fund needs at least a levy of 53c/l to fulfil its obligations. The Funds currently only collects 37,7cents/l for petrol, which will now rise to 39,7c/l, while the diesel levy rise to 43,7c/l from 41,7c/l.
“We have welcomed the Fund levy increase, but we are still underfunded as it is not sufficient. We were hoping for Government to at least grant us an amount that fully funds us as the other sources of revenue can be utilised in other critical areas,” he said.
Tjiuoro added that the levy is short of 10c and 14c respectively for the Fund to achieve its aim of total self-funding, but that Government has reiterated that the MVA Fund should look for other financial sources of revenue or funding instead of relying on the fuel levy.
Following the fuel decrease announcement last week Friday, Katali said that global oil prices declined by the biggest amount in three years.
Katali said it is important to caution that the Europe-Iran sanctions came into effect on July 1, a situation that would see a million barrels removed from the market due to supply disruption and that prices of crude may increase sharply again in the months ahead if a short-fall in the supply of oil prevails for a longer period.
“From a demand-supply perspective, two factors play a major role in determining the price of tradable commodities, and there seems to be substantial amount of oil in the market - hence demand has surpassed supply to drive down the price.”
The new Walvis Bay fuel pump prices for controlled petroleum products (petrol and diesel) will be adjusted as follows: - 93 Octane lead replacement petrol retail prices decreases by 75c (N$9,28per litre), 95 Octane petrol falls by 75c (N$ 9,40per litre).
The wholesale prices for diesel, decreases by 50c (N$9,86 per litre).