Namibian motorists may soon face higher monthly transport costs as the Road Fund Administration (RFA) plans to increase the fuel levy by N$2.06 per litre to N$4.46.
The adjustment is expected to push average fuel expenses above N$150 per month for private vehicle owners.
Simonis Storm economist Almandro Jansen said the proposed increase is aimed at closing a widening road maintenance funding gap.
He said the rise comes at a time when the costs of owning a vehicle are already elevated due to high fuel prices, insurance inflation and rising repair charges.
“Economically, the levy increase introduces a clear upward shock to the total cost of vehicle ownership (TCO),” Jansen said.
He noted that private motorists could face additional monthly expenses of between N$150 and N$300 depending on vehicle size and distance travelled.
“High-mileage users, including taxis, couriers and freight operators, are expected to see monthly increases of N$900 to more than N$1,000,” he said. “The added burden over a five-year financing cycle is material, ranging from N$9,000 for small vehicles to more than N$50,000 for fleet operators.”
Jansen said the impact would resemble higher instalments at a time when household and business budgets remain tight.
The economist added that concerns over how infrastructure funds are spent complicate public sentiment around the levy increase.
“Industry commentators have criticised the development of unnecessarily high-specification projects, so-called ‘Rolls-Royce roads’, noting that Namibia could achieve wider network coverage through more cost-effective designs,” he said.
Jansen said the planned fuel levy rise also risks worsening depreciation rates if basic road maintenance is neglected.
He noted that the October 2025 interest rate cut to 6.50 percent provides only partial relief and does not counter the structural pressures caused by higher levies.
“In the end, the success of the policy will depend on credibility and execution,” he said. “If levy proceeds are ring-fenced and visibly directed toward road preservation rather than high-cost projects, the long-term benefits would include safer roads, lower maintenance inflation and more stable vehicle depreciation patterns.”
He warned that if this does not happen, motorists could face both higher fuel costs and rising repair bills as affordability pressures continue to build, influencing consumer behaviour into 2026.
