Govt hikes fuel tax by 60%

The higher fuel tax is necessary to generate additional revenue for government.

05 February 2018 | Energy

The 60% increase amounts to around N$154 in additional revenue in 2018/19. – Dylan van Wyk, Cirrus Capital

Jo-Maré Duddy – Although the increase in fuel tax announced by the ministry of mines and energy won’t be much of a budget boost, it is a “move in the right direction”, Dylan van Wyk of Cirrus Capital says.

Van Wyk commented on the ministry’s statement on Friday, saying that, effective from 7 February 2018 [Wednesday], fuel tax will rise by 15c/l on the price of all regulated fuel products – from 25c/l currently to 40c/l.

“In order to generate additional revenue for the government, the ministry of finance has increased the tax on fuel,” mines and energy minister Obeth Kandjoze said in his statement.

Despite an under-recovery of between 3c/l and 6c/l on diesel in January, the ministry decided to keep the diesel price unchanged for February – N$11.73 per litre of diesel 500ppm and N$11.78 per litre of diesel 50ppm at Walvis Bay. An over-recovery of nearly 19.7c/l on 95 octane unleaded petrol was recorded as at 25 January this year. The petrol price of N$11.70 per litre at Walvis Bay will also remain the same this month.

Kandjoze said “fuel prices will be reduced by 15c/l in the ready reckoners in order to offset the fuel tax increase and keep the pump prices unchanged”.


In response to an enquiry by Market Watch, Van Wyk said the impact of an increase in fuel tax should have a small impact on the fiscal budget.

“According to the mid-year budget review, around N$256 million is estimated to be collected in 2017/18 budget year. The incremental tax (60% increase) amounts to around N$154 in additional revenue in 2018/19 while the deficit for 2018/19 is estimated to be in the region of N$7.8 billion,” he said.

“Still, this is a move in the right direction,” Van Wyk said. The timing of the increase to coincide with lower petrol prices, which results zero net effect on pump prices, will have no effect on consumers and minimal effect on inflation, which is a good thing, he added.

Oil price

Kandjoze said the results of the latest fuel price review indicate that the average Free On Board prices per barrel has increased for ULP 95 and for both diesel grades. Barrel prices for refined oil traded at an average of US$77.084 for ULP95, and US$79.693 and US$79.916 for diesel 500ppm and diesel 50ppm respectively.

“The Basic Fuel Price Unit Rate Slate calculations for the past month recorded a combination of minor over and under-recoveries on the price regulated petroleum products. The over- and under-recoveries recorded are not sufficient enough to trigger any adjustment in local pump prices,” he said.

The average exchange rate fell from N$13.1423 to about N$12.2642 per US$ over the period reviewed, Kandjoze said. “The appreciation of the N$ against the US$ has kept the balance between the regulated prices and the market prices intact,” he said.

Reuters reports that oil prices fell on Friday as the US dollar surged following strong US jobs numbers, though compliance with output cuts by OPEC and rising global demand kept much of the early-year oil rally in place.

Brent, the global benchmark, was down US$1.02, or 1.5%, to US$68.62 a barrel.

“Oil prices have come under pressure because of rising oil production in the US, together with a marginal rebound in the US dollar index. The price is currently in overbought territory, which has also promoted profit taking," said Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London. – Additional reporting by Nampa/Reuters

Similar News


There will be power – Nampower

5 days ago - 14 June 2018 | Energy

Nampower has assured the public that there will be no power outage tomorrow, as was stated in a widely circulated WhatsApp message. The message read:...

500ppm diesel to go

1 month - 02 May 2018 | Energy

The ministry of energy has announced that diesel 500 ppm will be phased out by 1 January 2019, while a variant containing less sulphur -...

Kudu scaled down to 442 MW

1 month - 24 April 2018 | Energy

The Kudu gas-to-power project has been scaled down from an initial 800 megawatts (MW) to just 442 MW.This is to allow it to fit into...

Power fears grow

2 months ago - 23 March 2018 | Energy

Arandis Power managing director Ezio Vernetti has urged NamPower to re-engage with his company as the “reserve bidder”, following the unceremonious canning of the N$5...

Fuel facility 'too complex' for Namcor

3 months ago - 15 March 2018 | Energy

Mines and energy minister Tom Alweendo has confirmed that the National Petroleum Corporation of Namibia (Namcor) and a strategic partner will jointly manage the country's...

Angolan rains save Ruacana

3 months ago - 15 March 2018 | Energy

The good rains received in the Lubango area of Angola over the past few weeks have rescued the power-generating activities at the Ruacana hydropower station...

Fuel storage scramble

3 months ago - 07 March 2018 | Energy

The National Petroleum Corporation of Namibia (Namcor) is positive that it will be chosen to manage the strategic fuel-storage facility once it is completed, although...

Namcor advertises lubricant tender

3 months ago - 22 February 2018 | Energy

The National Petroleum Corporation of Namibia (Namcor) earlier this month called for international bids for a lucrative five-year tender for the supply and delivery of...

Govt hikes fuel tax by 60%

4 months ago - 05 February 2018 | Energy

Jo-Maré Duddy – Although the increase in fuel tax announced by the ministry of mines and energy won’t be much of a budget boost, it...

Mulunga returns to work, denies suspension

4 months ago - 23 January 2018 | Energy

OGONE TLHAGEDespite media reports that National Petroleum Corporation of Namibia managing director Immanuel Mulunga was suspended, or given ‘special leave’ as his board chairperson Patrick...

Latest News

Kingon re-appointed as SARS commissioner

23 hours ago | Economics

South African Revenue Service (SARS) acting commissioner Mark Kingon’s time at the helm has been extended by another three months, after minister of finance Nhlanhla...

Support for refugees

23 hours ago | Economics

NDAMA NAKASHOLEA total of N$13.2 million has been allocated in 2018/19 financial year to the administration of refugees programme under the home affairs ministry.The programme...


23 hours ago | Economics

Quote of the day“The Minerals Council believes that much more work needs to be done to create a Mining Charter that promotes competitiveness, investment, growth...

Court reins in spies

23 hours ago | Justice

The flimsy fig leaf of national security and secrecy, used by government, especially the Namibia Central Intelligence Service (NCIS), to withhold information in a constitutional...

Phosphate judgment on Thursday

23 hours ago | Environment

Environment minister Pohamba Shifeta has reserved judgment until Thursday on whether the granting of an environmental clearance certificate to Namibian Marine Phosphate (NMP) will be...

Public grills ECN contenders

23 hours ago | Government

OGONE TLHAGEThe Electoral Commission of Namibia (ECN) has started interviewing candidates for the position of chief electoral officer.For the first time ever, the process, which...

Otjomuise shack fire claims two

23 hours ago | Crime

JANA-MARI SMITH A shack fire in Windhoek’s Otjomuise area killed two people over the weekend.The police reported that the two...

Katrina takes time into own...

23 hours ago | Education

The education ministry has issued a directive that schools may not start earlier than 07:30 or later than 08:30.This follows numerous directives issued by the...

Two in court after drug...

23 hours ago | Justice

Two men arrested in connection with a drug bust at the port of Walvis Bay on Friday made their first court appearance yesterday. Grant Noble...

Load More