Is it time we sneaked 'ngungula' imports into new Petroleum Act?

Namibia is reviewing the Petroleum Products and Energy Act, a move that comes amid ongoing global oil shocks that are pushing up local fuel prices.

Every litre consumed in Namibia still carries the weight of decisions made far beyond its borders – from Middle East tensions to refinery outages in Asia and Europe.

The result is rising pump prices, rising transport costs and a slow squeeze on households and businesses. And if left unchecked, massive job losses.

Yet just across the northern border lies Angola, an OPEC member with some of the continent's cheapest fuel.

The contradiction is that Namibia is discussing reforming its fuel law – but not addressing shortages.

The current system is anchored in the Petroleum Products and Energy Act 13 of 1990, a law crafted at a time when Namibia’s primary concern was security of supply, not flexibility of sourcing.

The Act gives the minister sweeping powers to regulate, and, where necessary, prohibit the purchase, sale, supply, acquisition, storage, and transportation of petroleum products, effectively placing the entire fuel chain under state oversight.

Under the Act, only licensed wholesalers may import fuel in bulk, and such imports are subject to permits, conditions, and regulatory oversight before they can enter the market.

The law requires that petroleum products imported into Namibia comply with approved specifications, ensuring that fuel entering the system meets prescribed national standards.

That structure has produced a tightly managed system in which fuel flows through defined, approved channels, largely organised around coastal imports and long-standing supply arrangements.

The model prioritises predictability and compliance, and over time, it has delivered a stable supply while protecting revenue collection and consumer standards. Only now the world has changed.

Quality concerns

Namibian authorities have consistently defended the country’s position on Angolan fuel on grounds of quality control, maintaining that these controls are necessary to ensure compatibility with modern engines, protect consumers and uphold environmental standards.

In 2022, former National Planning Commissioner director general Oberth Kandjoze told the Observer that importing fuel from Angola would not necessarily reduce costs but could be more expensive because the fuel would require additional processing.

While it is not clear how much it would cost to bring 'ngungula' – illegal cross-border fuel, which is locally referred to as 'ngungula' – up to the required standard, basic thinking suggests that it will not cost much, given its proximity and guaranteed availability.

In November 2018, former mines and energy minister Tom Alweendo said ngungula deprives the state of much-needed revenue, compromises public safety and poses an environmental risk.

“If left unattended, the sale of smuggled fuel at cheaper prices has the high potential of driving existing service station owners out of the economy,” Alweendo warned when he launched the fuel information-sharing campaign at the border point of Oshikango.

In other words, Alweendo confirmed that allowing Angolan fuel would kill existing fuel stations, and in the same breath, without pronouncing it, said the consumer must 'die'.

This is why Angolan fuel imports should be included in the amendment to save lives, keep jobs and grow the economy.

His deputy then, Kornelia Shilunga, said Angola uses diesel at 2 000 parts per million (ppm), compared to Namibia’s 50 ppm and 10 ppm, which are cleaner than 2 000 ppm.

Bigger picture

What Shilunga said is not a problem compared to what could happen if fuel prices keep rising and companies are forced to send people home.

In March, the energy ministry's executive director, Moses Pakote, told New Era that the system is designed to keep unregulated fuel out of the formal market.

“Namibia relies on a combination of licensing controls, border enforcement, inspection and sampling, record audits and inter-agency cooperation to prevent smuggled Angolan fuel from entering the regulated retail fuel system," said Pakote.

Parliament can address all these concerns in the ongoing debate on amending the Petroleum Act to cushion the people against unfettered prices, rather than focusing solely on the upstream petroleum unit.

The amendments should be crafted without collapsing the regulated system that licensed companies rely on and create a controlled opening, not a free-for-all.

The law can be amended to allow designated cross-border import licences, specifically for fuel sourced from Angola.

These would not replace existing supply chains but sit alongside them, with strict conditions on volumes, quality testing and points of entry.

Government should then build infrastructure to ensure that ngungula meets the sulphur specifications and other technical standards.

Additionally, government could introduce a variable levy mechanism for such imports, allowing limited relief at the pump without dismantling the levy system that funds roads and infrastructure.

Quotas or phased integration could prevent cross-border fuel from flooding the market and undercutting established service stations.

Formalising northern fuel depots and testing facilities would shift informal trade into a regulated stream, ensuring quality compliance while reducing transport costs associated with coastal imports.