Mines Ministry maintains fuel prices despite drop in oil prices

Petrol and diesel prices will remain the same in November, the Ministry of Mines and Energy has announced.

In Walvis Bay, the price of petrol will remain at N$22.88 per litre, diesel 50ppm at N$23.15 per litre, and diesel 10ppm at N$23.35 per litre.

The Ministry said the decision was reached following a recent decline in oil prices.

Oil prices plummeted by over N$101 (US$5.00) this month, primarily due to a decrease in fuel demand, which overshadowed OPEC's determination to sustain a reduction in oil production, thereby keeping the supply tight.

"The supply of diesel, often used as a proxy for demand, fell to approximately 8 million barrels per day, marking its lowest point this year. Additionally, crude oil prices saw a significant decrease of approximately US$10 (N$202) during this period," the ministry said.

In addition to the falling oil prices, the exchange rate from 1 to 23 October showed a 0.57% depreciation of the Namibia dollar against the United States dollar.

"The exchange rate shifted from N$19.1032 per US dollar at the beginning of October 2023 to N$18.9938 per US dollar at the end of September 2023, increasing the foreign exchange burden for importing fuel to Namibia," the ministry said.

Considering all these factors, the Ministry's fuel pricing model showed an over-recovery of 148 cents per litre on petrol and under-recoveries of 33 cents per litre on diesel 50ppm and 23 cents per litre on diesel 10ppm.

As a result, the Ministry has officially declared that petrol and diesel prices will remain unchanged.

To address the under-recoveries on diesel grades, the National Energy Fund will step in to absorb the added costs.

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