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The Ministry of Mines and Energy announces that fuel pump prices will increase on 1st November 2017 at 00h01.

The OPEC-non-OPEC producing countries’ Joint Ministerial Monitoring Committee (JMMC) has said based on the report of its Joint Technical Committee (JTC) for September 2017 that OPEC and participating non-OPEC producing countries have achieved a record high conformity level with the voluntary production adjustments, reaching 120 per cent.

The JMMC was established following OPEC’s 171st Ministerial Conference Decision of November 30, 2016, and the subsequent Declaration of Cooperation at the joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting on December 10, 2016, at which 11 (now 10 after Equatorial Guinea became a Member of OPEC ) non-OPEC oil producing countries cooperated with the 13 (now 14) OPEC member countries in a concerted effort to accelerate the stabilization of the global oil market through voluntary adjustments in total production of around 1.8 million barrels per day.

The resulting declaration, which came into effect on January 1, 2017, was for six months. The second joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting, held on May 25, 2017, decided to extend the voluntary production adjustments for another nine months commencing from July 1, 2017.

In September 2017, the OPEC and participating non-OPEC producing countries achieved an excellent conformity level of 120 per cent, the highest level since the start of the Declaration of Cooperation. This again underscores the resolute commitment of participating producing countries to cooperate towards the rebalancing of the market.

The JMMC expressed satisfaction with the overall results and encouraged all participating countries to continue on the path towards conformity, for the benefit of producers and consumers alike.

The JMMC noted that while some participating producing countries have consistently performed beyond their voluntary production adjustments, others are yet to achieve 100 per cent conformity. The JMMC took note of the recent developments in the market and expressed confidence that the oil market is moving in the right direction towards the objectives of the Declaration of Cooperation.

Indicative of these positive developments are the recent upward revisions for global oil demand growth in both 2017 and 2018. The JMMC will continue to monitor other factors in the oil market and their influence on the ongoing market rebalancing process. All options are left open to ensure that every effort is made to rebalance the market for the benefit of all.

The results of the latest fuel price review indicate that the average Free On Board prices per barrel remained stable for ULP 95 and for both Diesel grades. Barrel prices for refined oil traded at an average of US$ 68.239 for ULP95, US$ 68.379 and US$ 68.800 for Diesel 500ppm and Diesel 50ppm respectively. The Basic Fuel Price Unit Rate Slate calculations for the past month recorded under-recoveries on all the price regulated petroleum products. The under-recoveries recorded are sufficient enough to trigger an increase in local pump prices.

The average exchange rate moved up from N$13.1485 to about N$ 13.5553 per US$ over the period reviewed. The depreciation of the N$ against the US$ coupled with the fact that there was no upward adjustment for October 2017 prices despite the under-recovery situation back then contributed to the higher under-recoveries recorded during the current period.

Industry Margin

The latest Petroleum Activities Return (PAR) report indicates that oil companies are failing to generate sufficient returns on their investments in the petroleum sector and there is a need to adjust their margins to a level that would encourage sustainability and further investment.

The Ministry has, therefore, decided to increase the Industry Margin by 7 c/l from 84 c/l to 91 c/l on all the price regulated fuel products. The effective date for this adjustment is the 1st of November 2017.

The over/(under)-recoveries per product on the BFP import parity landed in Walvis Bay calculated as at 23 October 2017 are indicated below:

95 Octane Unleaded Petrol	52.686 c/ℓ
Diesel 500ppm	80.518 c/ℓ
Diesel 50ppm	79.126 c/ℓ

 

Fuel pump prices in Walvis Bay will increase as follows:

95 Octane Unleaded Petrol	increase by 40 c/l (retail)
Diesel (all grades)	increase by 60 c/l (wholesale)

Thus,the new Walvis Bay pump prices will be:

95 Octane Unleaded Petrol	N$ 11.20 per liter
Diesel 500ppm	N$ 11.23 per liter
Diesel 50ppm	N$ 11.28 per liter

Fuel pump prices countrywide will also be adjusted accordingly.

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.