Chart of the Week

When input costs rise, prices rise. When input costs fall, margins rise.

Brent crude spot prices in Namibian dollar terms have spiked sharply since the US-Israel-Iran war, but at the time of writing (13 March) they are still only around where they were at the start of the Russia-Ukraine invasion in late February 2022. Namibian petrol prices, by contrast, remain 25% higher than they were then.

There are other considerations, however, some of which have improved and some of which have worsened. There is some truth in the argument around lower global shipping costs, with the latest Shanghai Containerised Freight Index print of 6 March 2026 (which is expected to rise in the next release) still about 60% below its level at the start of the 2022 invasion. A more relevant market now, however, is tanker logistics and war-risk cover in the Gulf. Some insurers have cancelled war-risk coverage after the recent widening of the conflict left vessels stranded around Hormuz, while Middle East-to-Asia oil shipping rates had nearly tripled since the start of the year. Maritime war-risk premiums have increased by more than 1,000% in some cases, with hull war-risk premiums rising from about 0.25% of vessel value before the conflict to as much as 3%.

Namibian fuel prices are stickier, however, and Namibia does not pay fuel prices in line with real-time movements in international crude oil prices. Instead, the National Energy Fund manages pricing after taking into account shipping costs, insurance, exchange-rate movements, inland transport, taxes, levies and the slate account. The slate account deals with under-recoveries and over-recoveries that arise when local pump prices are fixed but landed international fuel import costs move. In essence, the Fund smooths the shock to protect consumers from volatility. However, when landed fuel prices spike abnormally high, this reduces the Fund’s ability to protect consumers, and when those buffers reach a critical point, Namibian fuel prices are increased.

As Namibian fuel prices were left unchanged for March, consumers were given a breather, as Namibians still have an opportunity to fill up before what now looks like a highly likely fuel price increase in April. One can expect petrol stations to be packed at the end of March.

Should the conflict persist, fuel price increases could become uglier than those seen in 2022, given that the non-oil cost base has risen. This includes (but is not limited to) RFA levies, which increased to 243c/L, and the dealer margin, which increased to 236c/L. The appreciation of the Namibian dollar/South African rand has also begun to reverse since the conflict began.

In South Africa, the Central Energy Fund is currently pricing in an almost R4.00/L increase for petrol in April, and nearly R7.00/L for diesel, on top of fuel levy adjustments totalling 21c/L announced in the 2026 Budget. Should the Namibian adjustment follow a similar magnitude, local fuel prices would move immediately above current all-time highs.

Tannan Groenewald is the head of data analystics at Cirrus Capital.