Fuel on the rise again despite cheaper crude

Fuel prices are expected to increase on Wednesday after midnight after several months of decreasing prices. The Minister of Mines and Energy, Obeth Kandjoze, said the increase is due to a sharp increase in freight rates, despite a relatively strong Namibia dollar. “Last month, the average exchange rate was N$12.0267 for every US dollar, in comparison to N$11.9341 this month,” said Kandjoze. “Despite that fact, Namibian fuel pump prices continue to be pushed upwards by other escalating import-related cost components such as freight rates.” He added that the prices of crude oil in the global market continue to fall due to a continuous oversupply of the product. According to Kandjoze this is where the international fuel market needs to strike a balance to stabilise pump prices. The minister indicated that prices would increase by 20 cents a litre for 95-octane unleaded petrol and all grades of diesel. This means a pump price of N$10.59 per litre of 95-octane unleaded petrol, N$10.52 per litre of diesel 500ppm and N$10.62 per litre of diesel 50ppm. “Interestingly, Iraq is taking OPEC’s strategy to defend its share of the global oil market to a new level,” Kandjoze said. “The nation plans to boost crude exports by about 26 percent to a record 3.75 million barrels a day next month, according to shipping programmes, signalling an escalation of OPEC strategy to undercut US shale drillers in the current market rout.” He added that the additional Iraqi oil is equal to about 800 000 barrels a day, or more than what comes from OPEC member Qatar. “The rest of the Organisation of Petroleum Exporting Countries are expected to rubberstamp its policy to maintain output levels.” Kandjoze said for the consumer the future looks bright in terms of lower oil prices due to oversupply. WINDHOEK ELVIS MURARANGANDA