Watching the pump

Fuel is an important part of the whole economy and its price is worth watching all the time.

31 July 2018 | Economics

“Since fuel prices account for 9% of the consumption basket that determines the inflation rate, the current fuel price increases will result in a higher inflation rate.” - IPPR

NDAMA NAKASHOLE

The adjustment in TransNamib’s bulk fuel rail rate by between 10 cents and 29 cents per litre during the month of July pushed fuel prices to levels last seen in the second quarter of 2014.

The mines and energy ministry granted the request by TransNamib to adjust its bulk fuel rail rate effective 4 July 2018.

The Institute for Public Policy Research (IPPR) says in its July 2018 Economy Watch publication that motorists can expect more fuel hikes.

In a press release on 28 June, the ministry of mines and energy announced an increase in fuel prices which became effective on 4 July.

“Since fuel prices account for 9% of the consumption basket that determines the inflation rate, the current fuel price increases will result in a higher inflation rate,” the IPPR says.

The ministry said the July increase was based on the fact that oil companies paid more for importing fuel the previous month.

Motorists have been spared steeper price increases because the government decided to use the National Energy Fund to absorb under-recoveries that ranged between 45.3 cents per litre for diesel 50ppm and 52.6 cents per litre for petrol.

“Times are tough and mindful of the fact that the oil price is the cornerstone of the global economy, in that it is not just a cost at the pump for motorists, but also a cost factor in the price of numerous other commodities from the food on our tables to flight tickets, the National Energy Fund will subsidise for every cent due to oil companies that would otherwise have triggered a price increase,” the ministry said.

The IPPR agrees, saying that it is not only the direct impact of fuel price rises that is felt by the consumer, but also second-round effects through producers that face higher input costs.

“According to information from the Social Accounting Matrix 2013, the fishing sector is most affected by rising fuel prices, since fuel accounts on average for 29% of input costs.

“Fuel contributes about 24% to the total input costs of the transport sector, 20% to base-metal (copper, zinc, etc.) mining, 16% to electricity generation and 11% to uranium mining.

“It can be expected that increasing input and transportation costs will be passed on to the consumer,” says the research institute.

Motorists in Windhoek pay N$12.72 per litre for petrol, which amounts to an increase by 12.4% compared to a year ago and exceeds petrol prices in 2014 when they stood at N$12.51 per litre. Diesel prices in-creased to N$13.11 per litre for 50ppm resulting in an increase by 22.4% com-pared to July 2017. They, however remained slightly below prices between March and June 2014 of N$13.15 per litre.

Similar News

 

Households drive credit uptake in June

13 hours ago | Economics

PHILLEPUS UUSIKURisk appetite among borrowers remains subdued, with credit extended to the private sector moderating to 2.7% year-on-year in June 2021 from 2.8% year-on-year in...

Du Toit acting as CEO of Agribank

13 hours ago | Economics

STAFF REPORTERThe Agricultural Bank of Namibia (Agribank) has announced the appointment of Louis Du Toit as the acting Chief Executive Officer (CEO). Du Toit replaces...

Bank of Namibia to conduct a BoP census

13 hours ago | Economics

STAFF REPORTERThe Bank of Namibia (BoN) intends on conducting a Balance of Payments (BoP) census in order to increase Namibia's BoP sample size and statistics....

Fuel price monster gentle with consumers

13 hours ago | Economics

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

SA's factory activity tumbles

13 hours ago | Economics

South African manufacturing activity shrank at its fastest rate in 14 months in July, weighed down by tighter coronavirus lockdown restrictions and civil unrest in...

Rail cargo transportation slipped into a decline

1 day - 03 August 2021 | Economics

PHILLEPUS UUSIKU During June 2021, Namibia transported 975 708 tonnes of cargo through rail, road, air and sea, compared to 810 940 tonnes and 779...

Electricity production capacity needs to improve

2 days ago - 02 August 2021 | Economics

PHILLEPUS UUSIKU For the month of June 2021, Namibia mainly imported its electricity from Eskom Aggeneis, Zesco-Firm Zambia and ZPC-Zimbabwe due to a decline in...

Nigeria's central bank ends dollar sales

2 days ago - 02 August 2021 | Economics

CHIJIOKE OHUOCHA AND LIBBY GEORGENigeria's central bank is halting dollar sales to exchange bureaus, saying they have become channels for graft and illicit flows of...

KwaZulu-Natal sets state of disaster

2 days ago - 02 August 2021 | Economics

The government of the province worst-hit by recent deadly unrest in South Africa on Thursday declared a state of disaster to divert funds towards recovery.Riots...

GIPF accepting funeral claims electronically

2 days ago - 02 August 2021 | Economics

The Government Institutions Pension Fund (GIPF) is delighted to inform their members and stakeholders that the Fund has amended the funeral claim submission procedure. GIPF...

Latest News

Olympic silver goes to Shinyungwe

13 hours ago | Sports

Limba Mupetami WINDHOEKNamibia’s Christine Mboma blasted from behind to claim silver in the 200m...

Icelanders not untouchable – Imalwa

13 hours ago | Justice

JEMIMA BEUKES WINDHOEKMartha Imalwa, Namibia’s Prosecutor-General (PG), said three Icelandic directors - who ran six fishing companies in Namibia - are under...

AR, SPYL war plays out...

13 hours ago | Justice

MATHIAS HAUFIKU WINDHOEKThe political battle between the Affirmative Repositioning (AR) movement and Swapo Party Youth League (SPYL) is said to be what...

Du Toit acting as CEO...

13 hours ago | Economics

STAFF REPORTERThe Agricultural Bank of Namibia (Agribank) has announced the appointment of Louis Du Toit as the acting Chief Executive Officer (CEO). Du Toit replaces...

Bank of Namibia to conduct...

13 hours ago | Economics

STAFF REPORTERThe Bank of Namibia (BoN) intends on conducting a Balance of Payments (BoP) census in order to increase Namibia's BoP sample size and statistics....

EDITORIAL

13 hours ago | Opinion

It’s excruciating to contemplate the disqualification of two naturally gifted Namibian women from an Olympics event due to a rule that seems to prescribe and...

Fuel price monster gentle with...

13 hours ago | Economics

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

MTC questions awarding of MTN...

13 hours ago | Technology

OGONE TLHAGE WINDHOEKMTC is questioning on what basis South African telecommunications giant MTN was...

Over 70 000 Namibians await...

13 hours ago | Health

JEMIMA BEUKES WINDHOEKGovernment is scratching its head in the face of a vaccine crisis, with about 70 000 Namibians waiting for...

Load More