Escalating Middle East conflict and global oil supply disruptions have driven up international crude prices, directly threatening Namibia’s import-reliant economy.
Petrol will increase by 60c while diesel 50ppm and diesel 10ppm will each go up by 160c per litre as of midnight on 2 September, the Ministry of Industries, Mines and Energy announced last week.
“War destabilises all facets of life, including economies, and Namibia is no exception,” Clayton Peel, a lecturer at the Namibia University of Science and Technology says, citing the first and second world wars as past drivers of inflation.
Petrol pump prices when the war in Iran started in February were N$19.58 per litre, while diesel 50ppm was N$19.63 per litre and diesel 10ppm cost N$19.73 per litre at Walvis Bay.
According to a statement, mines minister Modestus Amutse says the revised pump prices at Walvis Bay will now be N$25.08 per litre for petrol, N$27.86 per litre for diesel 50ppm, and N$27.96 per litre for diesel 10ppm.
Peel says the United States and Israeli-Iran war has hit the global economy particularly hard with the closure of the Strait of Hormuz, which handles about 25% of the world’s oil supplies and has caused oil prices to spike to around US$120 (almost N$2 000) a barrel (about 159l litres).
He says transport expenses and climbing global agricultural input costs such as fertilisers, reliant on Middle Eastern ammonia passing through the blocked Gulf trade routes, threaten ongoing food price stability.
“The rising cost of imported goods, transport, and basic commodities has steadily increased the cost of living, placing a heavy burden on vulnerable Namibian households,” Peel says.
Higher diesel and petrol costs have inflated operational expenses for public transport operators, such as taxi associations and freight companies, leading to higher fares and delivery charges passed directly to consumers.
Lydia Horn, a seed specialist, says driving to her farm in the Grootfontein area has become expensive as she now needs about N$1 900 for a full tank of fuel, compared to about N$1 500 before the war started in February.
“You have to think twice before driving and rely on using the phone to communicate,” she says, adding that instructions are often better conveyed face to face.
Because Namibia imports a substantial portion of its staple foods and agricultural inputs, escalating freight and transport expenses have caused higher retail food prices.
Dynamic Informal Traders Association executive director Tangeni Shindondola says wars cause fluctuating prices which in turn affect the informal economy.
“First it was the Russia-Ukraine war and now it’s the US-Iran war that is pushing up inflation and causing households to suffer,” she says, adding that the government has little control over the price escalation.
African leaders should sit down and strengthen trade among each other, she says.
“We have oil in Angola, Nigeria, Gabon, Equatorial Guinea, Ghana and many other countries. If we bought our oil from these countries, we would not be facing the difficulties we are facing today,” Shindondola says.
She says unstable oil prices have caused inflation to gallop out of control because Africa does not have ownership of its own resources, including the oil found on the continent.
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