Mines and Energy Minister Tom Alweendo has come out in defence of the National Petroleum Corporation of Namibia (Namcor), arguing there was nothing illegal about the state owned company’s involvement in fuel retailing.
According to the Fuel and Franchise Association (FAFA), Namcor’s management of the Walvis Bay oil storage facility gives it an unfair advantage over private companies in the fuel retail sector, where it now also operates service stations.
“It is also important for us all to understand that Namcor as a local brand also plays a catalytic role in improving Namibian local ownership in the sector, while still enhancing the security of petroleum product supply in the country. It is therefore on this basis that the Ministry does not see Namcor’s participation in the sector as conflicting or anti-competitive,” said Alweendo.
FAFA recently called for government’s intervention regarding viability changes in the sector, warning failure to reach a consensus, will result in the wholesale and retailers shutting down fuel stations until their demands are met.
According to Mines Ministry Economist Abednego Ekandjo, the government is yet to receive a formal notification of the said wholesale and retailers strike, “for now it remains a rumor, we have not been formally informed when and how.”
Although FAFA Chairperson Hennie Kruger was unavailable for comment, despite numerous attempts to reach him on his mobile phone, the organisation had also requested for an interim rescue margin, claiming that fuel retailers are operating at 5% low gross profit margin, which mainly goes towards servicing employee salaries and operational expenses.
However, Alweendo said although the government was sympathetic to the sector situation, it could not do much since its hands were tied.
He said the government had already cut some fuel levies, such as Road Fund Administration (RFA), the Motor Vehicle Accident Fund (MVA), Namcor, as well as the fuel tax for the Namibia Revenue Agency (NAMRA), as an austerity measure.
The minister blamed the sector challenges on the Covid-19 pandemic and the geo-political turbulence.
“The ministry will reconsider this position as soon as possible when the market stabilises,” he said, adding it was not prudent to increase the dealer margin.
FAFA also wanted a moratorium on the issuing of new licenses to new retail entrants, and the reinstatement of an annual margin survey to determine and assess fuel retail margins in the future, as well the halting or reduction of bank charges on swiping, which it claimed were being levied at 45 cents per litre.
The Minister said he will engage the various stakeholders to see how such charges can be reduced.
