Fuel panic stockpiling could trigger price crisis – officials

Growing panic stockpiling of fuel in Namibia could trigger artificial shortages and accelerate price increases, experts have warned, as global oil markets remain volatile amid escalating tensions involving the United States, Israel and Iran.

While supply remains stable for now, authorities say behaviour on the ground — particularly bulk buying by consumers and businesses — is emerging as a key risk factor.

Industry players say some consumers are purchasing fuel in unusually large quantities, in some cases storing up to 1 000 litres, a trend that is beginning to distort demand patterns.

Independent retailer Oswaldo Mendes said this behaviour mirrors the panic buying seen during the COVID-19 pandemic, when stockpiling created unnecessary shortages.

“People are rushing to buy fuel in bulk… That creates additional problems. While we all know fuel prices are going up, panic buying distorts the market and makes it difficult to gauge actual demand,” he said.

He stressed that the core issue is not an immediate shortage, but the rising cost of replacing fuel stocks.

“When the current fuel runs out, the replacement value will be higher than what consumers are paying now,” Mendes said.

Namibia reliant on imports

According to Ministry of Industries, Mines and Energy executive director Moses Pakote, Namibia is a net importer of all refined petroleum products and depends entirely on global markets.

The country consumes approximately 102 million litres of fuel per month — about 1.2 billion litres annually — with diesel accounting for roughly 70% and petrol 30%.

“Consumers and businesses are encouraged to continue using fuel efficiently… There is no need to alter normal purchasing behaviours. Panic buying can create artificial supply pressures,” Pakote said.

He added that while Namibia maintains buffer stocks to manage temporary disruptions, prolonged global supply shocks would inevitably affect all importing countries.

Strategic reserves in place

The National Petroleum Corporation of Namibia (Namcor) says Namibia currently holds enough fuel reserves to cover roughly three months of national demand.

A shipment is already on its way, and the country’s National Oil Storage Facility (NOSF) continues to provide a strategic cushion against immediate supply shocks.

The facility has a storage capacity of about 75 million litres and was established to ensure continuity during global disruptions.

“Volumes stored at NOSF fluctuate… and there are currently sufficient volumes to ensure Namibia's security of fuel supply over the foreseeable future,” Pakote said.

Global pressure points

Attention is increasingly focused on the Strait of Hormuz, a critical chokepoint through which about 20% of global oil supply passes.

Any disruption there would likely drive up international oil prices, freight rates and insurance costs.

“For Namibia, the primary anticipated impact is price-related rather than immediate physical supply disruption,” Pakote said.

He warned that if global crude oil prices continue to rise significantly due to geopolitical conflict, local fuel prices are likely to increase in the next review cycle.

Price mechanisms and cushioning

Fuel prices in Namibia are reviewed monthly and are influenced by international oil prices, exchange rates, freight costs, demurrage and other factors affecting the Basic Fuel Price (BFP).

Under the Petroleum Products and Energy Act, the minister has the authority to set price ceilings or floors.

Pakote said the National Energy Fund (NEF), through its cumulative slate account, may be used to cushion consumers against sharp price hikes.

“The cumulative slate account compensates for losses suffered and receives profits gained by suppliers… The aim is to subsidise under-recoveries… to minimise price volatility,” he explained.

Supply routes shifting

Mendes noted that Namibia traditionally sources fuel from global markets including the Middle East, India, Singapore, Europe and parts of Africa.

However, the ongoing conflict has disrupted traditional supply routes, forcing importers to consider alternatives that are more expensive.

“The route we were previously using can no longer be used because of the war… There are alternatives… but those options are more expensive,” he said.

He also cautioned against exporting fuel under current conditions, warning that it could create domestic shortages.