More hikes to add fuel to fire

Jo-Maré Duddy – The first fuel price hike for 2022 motorists face on Wednesday won’t be the last, economists have warned.Filling a fuel tank this February will be nearly 35% more expensive than in February 2021. A year ago, a litre of petrol at Walvis Bay cost N$11.85. On Wednesday, it will by N$4.10 more expensive than the N$11.85 last February. The diesel price at the coast will increase to N$15.98 compared to N$11.88 a year ago.Given the weaker Namibia dollar and higher global oil price expectations, Simonis Storm (SS) foresees fuel prices hike for March and April too.Reacting on government latest fuel price announcement last week, SS said the mines and energy ministry (MME) will fund under-recoveries by using funds from the National Energy Fund (NEF). An under-recovery means the pump price paid by consumers is lower than the cost at which fuel was imported.Last month alone, under-recoveries amounted to N$67 million. In the last twelve months, the MME incurred a net under-recovery of N$9.28 per litre on petrol and N$5.60 per litre on diesel, SS said. “This implies that petrol and diesel prices should have increased to N$20.63/l and N$16.98/l respectively. With the objective of providing some financial relief to consumers, fuel pump prices have not reached these levels owing to the NEF,” the analysts said.INFLATION PRESSURECirrus Capital in its recently-released Economic Outlook 2022 the collapse in fuel prices in 2020 and subsequent highs in 2021 have seen pump prices reach record highs in Namibia, and thereby also fuelling higher inflation. “Indications are that global oil prices will remain elevated a while longer, and even with South African rand strength, we expect this to continue putting some pressure on price levels locally – although not the same extent we saw in 2021,” Cirrus said. The analysts added: “The danger with higher fuel prices is that they feed through into higher prices for goods and services where fuel/transport is a component, typically with a lag of several months. We expect this to feed through into the first half of 2022, before the high base from takes effect.”

More hikes to add fuel to fire

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Namibian Sun 2025-04-09

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More hikes to add fuel to fire

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Namibian Sun 2025-04-09

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