The government has been urged to scrap levies and taxes on fuel products to provide relief to motorists.
This was after the Ministry of Mines and Energy on Monday announced an unexpected huge fuel price increase for the month of April, with diesel recording the highest increase of N$2.95/litre and petrol going up by N$1.95/litre effective Wednesday, 6 April 2022.
The announced increase means that petrol and diesel prices will rise to N$19.10 and N$20.23 respectively. Both petrol and diesel prices have increased by about 51% and 60% in the last twelve months respectively.
Economic advisory firm Simonis Storm said the government should revise its tax regime and only reinstate fuel taxes once global oil prices normalize.
Namibian fuel dealers are currently charged a levy of 90c/ litre on fuel, a Road Fund Administration levy of N$1,36/ litre, a Motor Vehicle Accident Fund levy of 47c/litre, and a National Energy Fund levy of 98c/litre, a position which has also been blamed for driving up the fuel pump price.
South Africa on Thursday implemented the measure, with Finance Minister Enoch Godongwana announcing that the country’s general fuel levy will be cut by R1.50 per litre from Wednesday next week to 31 May 2022.
Namibia, according to Simonis Storm,however still has the lowest petrol price per litre compared to the US, Germany and South Africa in US dollar terms., while in Rand terms, Namibia’s petrol prices are more expensive than some other Southern African economies, but cheaper than most other emerging markets and developed countries.
Oil prices have jumped as Western allies imposed more sanctions on Russia and blocked some Russian banks from a global payments system, a development which has been attributed to severe disruption to its oil exports.
Over the past few months the government – through the Ministry of Mines and Energy has been subsidising fuel prices using an under-recovery sum of N$2.20 on petrol and N$3.59 on diesel using funds from the National Energy Fund (NEF).
Official government figures show that the Ministry will incur over N$390 million in under-recoveries for March 2022
