Chart of the Week - Namibian fuel price breakdown

Following the surge in oil prices after the US-Israel-Iran conflict, fuel prices globally have been climbing at an accelerating rate. With the fuel price increases in April '26, many Namibians feel the squeeze at the pump. What most Namibians do not know, however, is how much of that burden is absorbed by the government, with fuel prices coming in much lower than they should be.

As shown in the chart, the actual pump price at Walvis Bay for all three fuel types sits at roughly N$19.60 per litre, whilst the true cost to deliver fuel to consumers ranges from N$26.07 for ULP 95 to N$34.92 for ADO 50 and N$34.96 for ULSD 10 — resulting in significant under-recoveries of N$6.49 for ULP 95, N$15.29 for ADO 50, and N$15.23 for ULSD 10.

These under-recoveries are absorbed through the National Energy Fund (NEF), a state-managed fund financed primarily through fuel levies collected at the pump. The NEF was established to stabilise domestic fuel prices, cushion consumers against volatile international oil markets, and finance strategic energy initiatives.

When import costs rise sharply, as they have following recent geopolitical shocks, the NEF effectively subsidises the shortfall between what motorists pay and what fuel actually costs to bring into the country. To further ease the effects of the price increase, the government has cut fuel levies by 50% for three months, which will result in a loss of N$500 million per month for the government, placing additional strain on the NEF's capacity to sustain these interventions.

Since Namibia is completely dependent on fuel imports, external shocks have a major impact on how much is spent importing fuel. For both diesel variants, the Walvis Bay pump price does not even cover the import costs (BFP), let alone any levies or other costs — once again highlighting the massive financial burden that guaranteeing low fuel costs places on the government.

With diesel under-recoveries exceeding N$15 per litre, every litre sold deepens the gap that the NEF must ultimately bridge, raising real questions about the long-term sustainability of the current pricing relief, absent a meaningful retreat in global oil prices.