The Bank of Namibia has said the persistent high and volatile international oil prices continue to be a worrying factor that drives inflation in a number of net oil importing countries like Namibia.
The bank said in a monetary policy statement that due to heightened geopolitical tensions and supply disruptions in major oil producing countries such as Nigeria, the international price of crude oil has increased to around US$70 per barrel in recent weeks.

“As a result, the domestic fuel prices increased twice in a short period of time and further price increases are not excluded. Thus, more price pressure could come from this component going forward,” the bank said.
The bank said considering the latest inflation developments, forecasts and expectations, the risks to the outlook for inflation in the medium term to remain tilted to the upside, as inflationary pressures are expected to persist, mainly on account of volatile crude oil prices and expected increases in administered prices in the second half of the year.
“There is therefore a need for public utilities to exercise some restraint when considering increases in administered prices in order to contain further inflationary pressures,” the bank said.
The bank said growth in domestic demand seems to be abating as witnessed by the slowing growth in private sector credit extension and the number of vehicles sold.
The last fuel price increase was on 10 May when the Ministry of Mines and Energy said the average Namibia dollar/US Dollar exchange rate had weakened thus affecting the unit over /under recovery negatively which then lead to under recoveries being experienced in the local market.
The ministry increased Walvis Bay fuel pump prices for the controlled petroleum products, Petrol and Diesel, a move that resulted in 93 Octane Lead Replacement Petrol increasing by 21 cents per litre, 95 Octane Unleaded Petrol by 21 cents per litre and diesel going by 12 cents per litre.