Price of petrol in SA expected to increase
Namibia’s key trading partner
During January 2023, Namibia sourced most of its imports from South Africa.The petrol price in South Africa could be hiked in the first week of April, but diesel and illuminating paraffin may become cheaper, the latest data from the Central Energy Fund (CEF) shows.
Petrol may be increased by around 25 cents a litre, while the wholesale price of diesel could be lowered by around 20c a litre. Illuminating paraffin could see a cut of around 68 cents a litre.
Fuel prices, which will be adjusted on 5 April, are largely determined by the oil price, as well as the rand - as oil is priced in dollar.
While the Brent oil price has fallen from above US$84 a barrel to US$76 so far this month, the rand has taken a knock, falling to almost R18.70/$ last week – its weakest level in more than a year.
During January 2023, Namibia sourced most of its imports from South Africa. The total value of imports stood at N$10 billion, which was mainly driven by petroleum oils sourced from Singapore, Saudi Arabia and Malaysia.
Motor vehicles for the transport of goods and persons, which were part of the top five goods imported into Namibia, were sourced from South Africa for the period under review.
According to Simonis Storm, the weaker Rand exchange rate is likely to keep the import bill inflated. According to the Namibia Statistics Agency (NSA), inflation stood at 7.2% in February 2023, compared to 7% and 4.5% registered in January 2023 and February 2022, respectively.
However, Automobile Association (AA) of South Africa noted that the rand appears to be steadying against the dollar, which should bring further relief to petrol prices, specifically. The local currency was last at R18.36/$ by Wednesday lunchtime.
The AA added that this data is based on mid-month prices, so the numbers should change before the official adjustment at the end of the month.
Another consideration is that fuel levies will not be increasing in April and will stay at the same rate as they did in 2022, the organisation said.
In his Budget speech, Finance Minister Enoch Godongwana kept fuel levies unchanged.
"Although not a saving as such, any increases would have added additional pressure to fuel prices, and we again welcome his decision not to increase these rates for 2023," the AA said.
Petrol prices were hiked by R1.27 at the start of the month, while diesel increased by between 30c and 32c a litre.
In Gauteng, the price of a litre of 95 unleaded petrol increased to R22.95, while it will increase to R22.30 on the coast. A year ago, 95-octane petrol retailed for R21.60 in Gauteng.
The Gauteng wholesale diesel price reached R21.62, from R18.87 a year ago.
In Namibia, the price of petrol at Walvis Bay, which is the port of entry, is N$19.75 and N$20.65 per litre for diesel. The ministry of mines and energy said oil prices could increase due to undersupply and a rebound in demand. - Additional reporting Phillepus Uusiku