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Energy ministry suspends fuel licences, concedes to retailers demands

The Ministry of Mines and Energy has for the second time in two years temporarily suspended the issuing of downstream petroleum licences. 

On Thursday, the ministry announced its latest directive to bring sanity to the country’s fuel wholesale and retail sector, which is now saturated with licences. 

“This situation has created problems that ultimately led to high fuel prices in the country. The ministry will not accept applications for new fuel retail sites and wholesale licences nationwide until further notice,” mines and energy ministry spokesperson Andreas Simon said.  

Last month, the Fuel and Franchise Association of Namibia demanded a moratorium on the issuance of licences, among other things, which nearly led to a nationwide service station shutdown, citing viability concerns. 

The ministry was later forced to concede by increasing the dealer margin by 50 cents to 163 cents per litre to avert the strike.

The moratorium, according to insiders, aims to address the likelihood of further demands from dealers who share a margin collected from fuel sales.  

The more the dealers, the less the margin the dealers share. 

Previously, the ministry suspended applications for new fuel retail and wholesale licences, citing an oversupply of service stations in the country.

The ministry then cited the need to review the licensing procedures and requirements for granting fuel retail and wholesale licences, as provided for in the Petroleum Products and Energy Regulations of 2000.

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Last modified on Monday, 29 August 2022 17:11

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