Fuel price monster gentle with consumers

Constant fuel prices allow households to continue consumption spending in other sectors of the economy at the same pace.

04 August 2021 | Economics

We believe this decision is favourable to both household and business consumers, especially taking into account that petrol prices increased in South Africa by 91 cents. Simonis Storm

PHILLEPUS UUSIKU

The Ministry of Mines and Energy has announced that both petrol and diesel prices will remain unchanged countrywide for month of August 2021.

For Walvis Bay which is the port of entry, the price of petrol will remain at N$13.55 cents per litre and the diesel price will be kept at N$13.58 cents per litre. Last month, fuel prices increased by 40 cents per litre.

Given this development, Simonis Storm (SS) notes that household’s do not have to alter any other consumption decisions in order to better afford their monthly petrol and diesel expenses. Constant fuel prices allow households to continue consumption spending in other sectors of the economy at the same pace. Other sectors of the economy therefore benefit as fuel expenses do not consume a larger portion of households’ budgets.

“We believe this decision is favourable to both household and business consumers, especially taking into account that petrol prices increased in South Africa by 91 cents,” SS said.

Transport is the third largest category in the Namibian Consumer Price Index (NCPI) basket. This means, it’s the third largest item in an average household’s budget. With the latest inflation numbers for Namibia, the transport category contributed 32.3% to the total annual change in inflation for the month of June, SS added.

Currency

According to Andreas Simon, spokesperson of the ministry, the local currency depreciated slightly against the United Sates (US) dollar, from an average of N$13.93 in June to an average of N$14.40 in July 2021. Owing to the aforementioned factors, during the month of July, under recoveries were recorded.

An under-recovery of 91 .236 cents per litre was recorded on petrol while 50ppm diesel recorded an under-recovery of 66.896 cents per litre.

For the ministry to continue to soften the burden on the consumers and at the same time ensure the sustainability of the National Energy Fund (NEF), it has decided to keep the fuel pump prices for August 2021, unchanged, Simon pointed.

International prices of refined products have been fluctuating significantly during the period under review. The average price of refined petrol increased from US$80 in June to US$85 in July, whilst the average price of refined diesel increased slightly from US$78 in June to US$79 in July, he pointed out.

Outlook

Looking forward, oil prices look volatile as rising Covid-19 cases are posing a threat to oil demand recovery at a time when OPEC+ has announced to boost output with an extra 400 000 barrels per day from August through December. Still, forecasts indicate that demand is likely to overtake supply for the rest of the year, Simon said.

The ease of lockdown related restrictions worldwide, higher factory orders and an increase in the number of Covid-19 vaccinations, are all expected to drive a demand led increase in oil prices, SS added.

“We do expect higher fuel prices locally for the remainder of the year. Higher expected oil prices cannot extensively be absorbed by wholesalers going forward. We do expect higher oil prices to pass through to end consumers. We forecast an unleaded petrol price of N$13.95 by the end of this year, SS said.

Similar News

 

Vehicle prices locally on a rising trend

14 hours ago | Economics

PHILLEPUS UUSIKUGlobal shipping constraints and reduced production, resulting in delayed imports, are some of the factors that are driving up vehicle prices in Namibia.According to...

Save the economy by getting vaccinated

14 hours ago | Economics

STAFF REPORTERSpeakers at the ‘Pandenomics’ webinar recently hosted by Nedbank Namibia and Simonis Storm, and supported by Nedbank Business Banking and Nedbank Private Wealth, have...

Public transport on a standstill in Eswatini

14 hours ago | Economics

Public transport remained at a standstill Sunday in Eswatini, in the latest protest against Africa's last absolute monarchy, rocked by a wave of pro-democracy demonstrations.Private...

South Africa weighs need to save climate

14 hours ago | Economics

SOFIA CHRISTENSEN AND GRIFFIN SHEAWhen you fly into Johannesburg, solar panels seem to gleam everywhere, from the roofs of mansions and small township homes alike.But...

Blue Economy policy consultations on the go

14 hours ago | Economics

[email protected] BAY Consultative workshops with various stakeholders for the development of Namibia's sustainable Blue Economy policy are taking place across the country.The workshops are hosted...

The cost of living slightly under control

1 day - 18 October 2021 | Economics

PHILLEPUS UUSIKUDespite there being global supply constraints of goods, which is likely to fuel inflation, demand-pull inflationary pressures remain weak in Namibia due to consumers...

Supply chain crisis snags recovery

1 day - 18 October 2021 | Economics

MATHILDE DUMAZETClosed factories, clogged ports, no truck drivers up and down the global supply chain there are problems, raising concerns that it could disrupt the...

US donates J&J doses to African Union

1 day - 18 October 2021 | Economics

STEVE HOLLANDPresident Joe Biden told visiting Kenyan President Uhuru Kenyatta that the United States will make a one-time donation of more than 17 million doses...

South Africa, EU hold ‘intense talks’

1 day - 18 October 2021 | Economics

The European Union and South Africa are in “intense talks” on how to increase the availability of vaccines to developing countries, potentially breaking a year-long...

Tax debates in Nigeria could fuel violence

1 day - 18 October 2021 | Economics

PATRICK MARKEYA legal battle between Nigeria's government and states over sales tax is fuelling fierce debate about federalism in Africa's most populous country as politicians...

Latest News

Vehicle prices locally on a...

14 hours ago | Economics

PHILLEPUS UUSIKUGlobal shipping constraints and reduced production, resulting in delayed imports, are some of the factors that are driving up vehicle prices in Namibia.According to...

Body found in Kavango River...

14 hours ago | Crime

KENYA KAMBOWE RUNDUThe body of Engidius Kayanguya (35) from Rundu’s Sauyemwa township was found floating in the Kavango River last Monday with...

Church, civil society butt heads...

14 hours ago | Health

JEMIMA BEUKES WINDHOEKThe Voices for Choices and Rights Coalition wants abortion to be legalised up to the seventh month of pregnancy,...

PHOTO OF THE WEEK

14 hours ago | Picture Gallery

Miss Namibia 2021, Chelsi Shikongo, and her runner-up, Annerrie Maré, both received cars to help them fulfil their duties. For the first time since Pupkewitz...

Blowing out somebody else’s candle...

14 hours ago | Youth

Emilie MandumeThe ‘We Care’ project was established under the School of Destiny Association (SODA) Consultancy and launched in February 2021. The initial aim is to...

The learners of Pro-Ed Academy...

14 hours ago | Opinion

Ceara SinclairI’m a grade 8 learner and I like to make bullet points on my notes as it helps me remember stuff easily. I also...

Save the economy by getting...

14 hours ago | Economics

STAFF REPORTERSpeakers at the ‘Pandenomics’ webinar recently hosted by Nedbank Namibia and Simonis Storm, and supported by Nedbank Business Banking and Nedbank Private Wealth, have...

Isolation rape case transferred to...

14 hours ago | Justice

ADOLF KAURE SWAKOPMUNDGlenn Clifford Leister (27) made another brief appearance before the Swakopmund Magistrate’s...

EDITORIAL: Open-minded debate needed

14 hours ago | Opinion

The current abortion debate is filled with emotion, often revolving around moral, legal and religious arguments.The sides involved are the self-described "pro-choice" and "pro-life" movements....

Load More