Fuel Price Rises Again Source: Africa News Service Publication date: 2000-05-15

Windhoek - The Ministry of Mines and Energy has announced the second fuel price increase in four weeks. From Wednesday, the price of petrol and diesel will go up by eight cents a litre. In Windhoek, petrol will cost N$3,08 per litre and N$2,97 at Walvis Bay and Swakopmund. At Noordoewer petrol will cost N$3,21, N$3,17 at Luederitz and Keetmanshoop, N$3,12 at Katima Mulilo and Rundu and N$3,11 at Oshakati. Last month the Ministry announced that it was contemplating the feasibility of reviewing fuel prices on a monthly basis in order to smooth out fuel price fluctuations.

The Mines and Energy Ministry said the latest fuel price rise represented a three per cent hike on the price of both petrol and diesel. On April 12 the price of petrol increased by 25 cents per litre, while diesel went up by 20 cents per litre.

The Ministry attributed the fuel price increase mainly to the N$54 million backlog on the National Energy Fund which had been depleted due to price subsidisation and the depreciation of the South African rand in relation to the major trading currency, the United States dollar.

Since the beginning of the year, the rand has lost about 13 per cent of its value against the US dollar, resulting in the price at which Namibia procures fuel from overseas escalating.

"Before then the situation was only slightly less severe than now, due to the artificially inflated costs of crude oil trading. This created an imbalance between supply and demand and the subsequently destabilising crude oil prices," the Ministry said on Friday.

It said the oversupply of petroleum products from the world's producers had yet to be reached before a significant drop in crude oil prices could be expected. This it said would happen in the next two months.

(Copyright 2000 The Namibian.)

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-- Martin Thompson (mthom1927@aol.com), May 15, 2000