Petrol price remains unchanged
Diesel to become more expensive
The ministry of mines and energy announced that diesel prices will increase by 198 cents per litre, while the price of petrol will remain unchanged.
The new fuel prices in Walvis Bay will this week become N$24.10 per litre for diesel and will remain N$20.08 per litre for petrol. The diesel prices across the rest of the country will be adjusted accordingly and will come into effect at 00:01 on Wednesday, 2 November. The ministry emphasised that it will continue to set fuel prices at a level which is reflective of the oil market dynamic to ensure the security of fuel supply in the country.
Factors
Entering the following input factors into the fuel-pricing model, the ministry recommended a low over-recovery on petrol and a high under-recovery on diesel of 13 cents per litre on the former and about 260 cents per litre on the latter.
The ministry explained that international oil markets continue to expect a huge fall in oil demand amid strong signs of poor performance across many economies.
Additionally, further global economic slowdown is expected in future as the Federal Reserve and other central banks continue to increase interest rates to counter inflation.
“Fears of a global economic recession have kept oil prices somewhat static over the last few months.”
According to the ministry, oil prices are expected to rise in the coming months following the anticipated ban on Russian crude oil by the European Union, which is expected to come into effect on 5 December.
“In addition, the Organisation of the Petroleum Exporting Countries [Opec] Plus has also agreed to reduce crude oil output by about a million barrels per day from 1 November. This means that the supply of crude oil throughout the global market will likely decrease in the coming months. When oil supply decreases, oil prices increase.”
Levies reinstated
The ministry also noted that following recommendations and advice from the finance ministry, road user charges and the Motor Vehicle Accident (MVA) Fund levy were reinstated back to 148 cents per litre on 5 October. This has also placed additional pressure on local fuel prices paid by consumers at the pumps.
Factors
Entering the following input factors into the fuel-pricing model, the ministry recommended a low over-recovery on petrol and a high under-recovery on diesel of 13 cents per litre on the former and about 260 cents per litre on the latter.
The ministry explained that international oil markets continue to expect a huge fall in oil demand amid strong signs of poor performance across many economies.
Additionally, further global economic slowdown is expected in future as the Federal Reserve and other central banks continue to increase interest rates to counter inflation.
“Fears of a global economic recession have kept oil prices somewhat static over the last few months.”
According to the ministry, oil prices are expected to rise in the coming months following the anticipated ban on Russian crude oil by the European Union, which is expected to come into effect on 5 December.
“In addition, the Organisation of the Petroleum Exporting Countries [Opec] Plus has also agreed to reduce crude oil output by about a million barrels per day from 1 November. This means that the supply of crude oil throughout the global market will likely decrease in the coming months. When oil supply decreases, oil prices increase.”
Levies reinstated
The ministry also noted that following recommendations and advice from the finance ministry, road user charges and the Motor Vehicle Accident (MVA) Fund levy were reinstated back to 148 cents per litre on 5 October. This has also placed additional pressure on local fuel prices paid by consumers at the pumps.
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