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OPEC cuts to affect Nam fuel price, not supplies - Govt

By November 03, 2022 2479
OPEC cuts to affect Nam fuel price, not supplies - Govt

The Ministry of Mines and Energy says Namibia has enough fuel, including diesel, to meet increased demands, amid production target cuts announced by the Organisation of the Petroleum Exporting Countries (OPEC).

This comes amidst reports Namibia was now faced with a diesel shortage, a position which the energy ministry has attributed to panic buying by consumers and retailers trying to beat the diesel price hike which came into effect on Wednesday following a N$1.98 price increase on diesel to N$24.10 per litre. 

“There is fuel in the country, it's just that we announced an increase in the price. We have picked that OPEC will be cutting production, which will result in a cut in supply then that could ultimately lead to a shortage depending on how far we have stored,” Ministry of Mines and Energy (MME) Spokesperson Andreas Simon told The Brief.

“Depending on whether we have even gone as far as procuring for the other month as well. The current situation was just a scramble, to buy it at the old price not the new price. Once we announced there will be an increase in the diesel price, from the point of announcing we have seen that there has been a scramble for diesel, which has now led to an over purchase. Everyone wants to buy at the old price.”

Namibia on Wednesday increased diesel prices by N$1.98 to N$24.10 per litre, leaving petrol prices unchanged.

Simon added that the country’s current supplies will also be bolstered further by a vessel expected in the next two days.

“There is a vessel that is coming to add to what we currently have. The vessel should be here in two days’ time. Mind you, it's not that we are waiting for the vessel, but there is product. Mind you there is a product that is also earmarked for transit to Zambia and Botswana, so the oil companies are the ones who decide, should they first service the local market,” Simon said.

He said the decision by OPEC and non-OPEC allies — generally referred to as OPEC+ to cut production by two million barrels per day (BPD) from November, does not threaten supplies to the country, but product pricing.

“We have not, at the moment, had any indication from them that will lead to a concern for us and as a country. Based on that, we are quite assured that although fuel will go up, it's not the first time OPEC is cutting production. The oil majors (Puma Energy, Vivo Energy, Shell and Engen) who we solely rely on, the fact that they have not given us any indication for us to look for alternative supplies, for us its business as usual,” Simon said.

“In terms of preparedness, we solely rely on the current system which is in place… the oil majors. That same system will continue although OPEC has indicated that there will be a cut in production. I don’t think it's anything we should be worried about much unless it’s a concern of further increases of the product.” 

Namibia, according to data from the Ministry of Mines and Energy, consumes 90 million litres of fuel per month on average – 60 million litres diesel and 30 million litres petrol.

According to Cirrus Capital data, the country’s diesel prices are up 61.96% in November 2022 on a year-on-year basis, and 8.95% on monthly basis.

 

 

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Last modified on Thursday, 03 November 2022 20:36
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