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The Ministry of Mines and Energy has to announce that petrol and diesel pump prices for July will decrease on the 5th of July 2017, at 00h01.

The prices of both crude oil and refined oil have defied recent forecasts that were based on the OPEC agreement to cut oil production a few months ago. The expectations were that by June, the prices would be hovering above US$65 per barrel. For the past four months, the prices have not reached that threshold with June recording US$60 and US$57 for a barrel of refined diesel and petrol, respectively. These averages are not far from the preceding month’s averages of US$63 per barrel for refined diesel and US$60 for petrol.

The exchange rate between the Namibia Dollar against the US Dollar has also been favourable during the period under review. The average exchange rate for June 2017 was N$12.88 compared to May’s average of N$13.22. This means that importing fuel to our shore was less costly in June compared to the preceding month of May. Moreover, the cost for shipping oil tankers has also decrease in June as assessed by the London Tankers Broker, recording US$145.70 per metric tonne compared to US$151.30 in May.

When all the aforementioned cost elements were filtered through the local market, substantial over-recoveries were recorded. For the past few months consumers have not gotten a relief at the pumps because the results of the Basic Fuel Price model were not favourable. It is only fair that they get some relief this time around when the conditions are favourable.

The over-recoveries per product on the BFP import parity landed in Walvis Bay calculated as at 25 June 2017 are indicated below:

95 Octane Unleaded Petrol	60.234 c/ℓ
Diesel 500ppm	58.164 c/ℓ
Diesel 50ppm	59.536 c/ℓ

 

The present Walvis Bay fuel pump prices for the controlled petroleum products (Petrol & Diesel) are to be decreased as follows:

95 Octane Unleaded Petrol	50 c/l Decrease (retail)
Diesel (all grades)	50 c/l Decrease (wholesale)

The current Walvis Bay pump prices are high and the new pump prices will be as follows:

95 Octane Unleaded Petrol	N$ 10.50 per liter
Diesel 50ppm	N$ 10.33 per liter
Diesel 50ppm	N$ 10.38 per liter

Petrol and diesel pump prices at various inland destinations countrywide will also be adjusted accordingly.

The Ministry of Mines and Energy announces that fuel pump prices for February 2018 will remain unchanged. 

The Organization of the Petroleum Exporting Countries has pumped 32.4 million barrels per day (bpd) in January 2018, up 100,000 bpd from December 2017. Despite the increase in production, adherence by producers included in the deal to curb supply rose to 138 percent from 137 percent in December 2017, suggesting commitment is not wavering even as crude oil prices hit their highest level since 2014. OPEC is reducing output by about 1.2 million bpd as part of a deal with Russia and other non-OPEC producers. The pact will run until the end of 2018

The international oil market shows no sign of big OPEC producers boosting output significantly to cash in on rallying prices or to replace a decline in Venezuela, where output is dropping amid economic challenges. OPEC’s cut has boosted crude oil prices, which topped $71 a barrel for the first time since 2014 during the third week of January 2018. OPEC members are enjoying the extra income, though some in the group have expressed concern that it could encourage U.S. shale and other supply from outside producers.

In January 2018 the biggest increase in supply came from Nigeria, where some shipments originally planned for export in December 2017 slipped into January 2018. Top exporter Saudi Arabia boosted output by 50,000 bpd. Output in Libya edged higher by 30,000 bpd. The country restored some production that had been shut in by a blockade since November 2017. Both Nigeria and Libya were originally exempt from cutting supply because output was curbed already by conflict and unrest. For 2018 both countries told OPEC that output would not exceed 2017 levels. Among countries with lower output, the largest drop was in Iraq. The country exported almost 3.5 million bpd from the south, the outlet for most of its crude, in a slight decline from December’s record high. Output in northern Iraq is still down after falling in mid-October when Iraqi forces retook control of oilfields from Kurdish fighters

who had been there since 2014. This has had the side-effect of boosting Iraqi compliance with the OPEC deal. Production in Venezuela, where the oil industry is starved of funds because of a cash crunch, has fallen further. OPEC has an implied production target for 2018 of 32.6 million bpd, based on cutbacks detailed in late 2016 and taking into account changes of membership since and Nigeria and Libya’s expectations on their 2018 output.

The results of the latest fuel price review indicate that the average Free On Board prices per barrel has increased for ULP 95 and for both Diesel grades. Barrel prices for refined oil traded at an average of US$ 77.084 for ULP95, US$ 79.693 and US$ 79.916 for Diesel 500ppm and Diesel 50ppm respectively. The Basic Fuel Price Unit Rate Slate calculations for the past month recorded a combination of minor over and under-recoveries on the price regulated petroleum products. The over and under-recoveries recorded are not sufficient enough to trigger any adjustment in local pump prices.

The average exchange rate fell from N$13.1423 to about N$ 12.2642 per US$ over the period reviewed. The appreciation of the N$ against the US$ has kept the balance between the regulated prices and the market prices intact.

Fuel Tax

In order to generate additional revenue for the government, the Ministry of Finance has increased the tax on fuel. The Ministry of Mines and Energy has, therefore, decided to follow through and increase the Fuel Tax by 15 c/l from 25 c/l to 40 c/l on all the price regulated fuel products. The effective date for this adjustment is the 7th of February 2018. However, fuel prices will be reduced by 15 c/l in the Ready Reckoners in order to offset the fuel tax increase and keep the pump prices unchanged.

Import Parity

The over/(under)-recoveries per product on the BFP import parity landed in Walvis Bay calculated as at 25 January 2018 are indicated below:

95 Octane Unleaded Petrol	19.676 c/ℓ
Diesel 500ppm	(6.867) c/ℓ
Diesel 50ppm	(3.597) c/ℓ

 

Thus, fuel pump prices in Walvis Bay will remain as follows:

95 Octane Unleaded Petrol	N$ 11.70 per liter
Diesel 50ppm	N$ 11.73 per liter
Diesel 50ppm	N$ 11.78 per liter

 

Fuel pump prices countrywide will also remain unchanged.

Caption:  On the 29 June 2016 to 1 July 2016 NAMCOR staff members together with the Directorate of Petroleum Affairs in the Ministry of Mines and Energy undertook a trip on board the Maersk Drilling Rig.

 

 

The trip provided a worthwhile opportunity to NAMCOR and MME staff members to visit a drilling rig for the first time as well as familiarise themselves with oil and gas procedures on board a rig. The Maesrk drilling rig is comprised of crew from all over the world and the junior staff are always locally employed staff.

 

Caption: The Exploration & Production reached its WIG of N$20 400 million data sales.

 

Sales stand at a staggering N$22 537 458.27. A combination of efforts ranging from participation in carefully selected international oil and gas conferences, advertising in international oil and gas publications and specialised data promotional packages contributed to this commendable achievement.