Stable rand to help fuel prices
03 January 2019 | Energy
This follows a reduction in fuel prices for the months of December and January.
Expressing her opinion on recent fuel price movements, Nanghonga said: “Brent Crude declined by 36.2% to US$52.8 per barrel as on 2 January 2019 from a peak of US$82.7/barrel while the fuel price in Namibia [has] decreased by 13.6% since December 2018.”
Looking ahead, a stronger rand could help fuel prices come down by another small margin, she added.
“We expect fuel prices to decrease by a potential N$0.50 per litre in February 2019 with [the] assumption that global oil prices and the rand remain stable around these levels,” said Nanghonga.
The ministry of mines this week announced that fuel prices would decrease by N$0.90 for petrol and by N$1 for all variants of diesel. This means that in Walvis Bay, a litre of diesel 500 ppm will cost N$13.08, a litre of diesel 50 ppm will cost N$13.13 and a litre of petrol will cost N$12.05.
According to the ministry, the reduction in fuel prices was driven by an oversupply of fuel on the global market.
“The global oil market has now slipped into ebb mode where global oil prices have fallen by as much as 30%. The projected global meltdown has seen demand for oil falling while oil inventories have built up since October 2018,” mines minister Tom Alweendo said. The lower cost of importing fuel meant that there were over-recoveries in the Namibian market.
On the global front, a Reuters poll forecasts that 2019 US light crude will average US$61.05 per barrel this year, compared to US$67.45 projected in the previous poll. The price averaged US$64.98 in 2018.