Motorists will have to fork out more for fuel as of 1 June as the price of petrol will increase by N$2.50 per litre and diesel prices will increase by N$1.50 per litre, the Ministry of Mines and Energy announced.
This means the new petrol price will become N$20.40 per litre and N$21.43 per litre for diesel across the country.
Deputy Minister Kornelia Shilunga said on Monday that the price increases are necessitated by the turmoil in the international oil market.
“The Ministry is fully aware that the public is under a lot of financial pressure as far as the price of fuel is concerned. The Ministry would like to remind the public that Namibia is a price-taker in the international oil market. It is therefore important to understand that the government is only indirect control at the levels of the domestic levies, taxes, and margins regarding the price of fuel,”
Global Gasoline and diesel prices are increasing to record highs and do not show any sign of dropping. One of the reasons for this situation is that global refining capacity has fallen significantly since 2020 due to the Covid-19 pandemic.
Another reason is that world demand for oil has been picking up immensely following the worst of the pandemic, but the global oil supply is still failing to catch up. Oil markets are also leaning towards an upward pricing trend as a pending import ban by the EU on Russian crude is expected to further tighten global supply.
“The EU has proposed a new package of sanctions against Russia due to the events in Ukraine, including a total ban on oil imports in six months, but the measures have not yet been adopted. These sorts of announcements are only serving to further stoke fears of an oil supply crisis in the global oil market,” Shilunga stressed.