Petroleum Downstream


One of the objectives stated in the Ministry of Mines and Energy's White Paper on Energy Policy is to ensure the security of energy supply to support the growing demand for energy services. Energy supply plays a pivotal role in all developed and developing countries. Namibia has no refinery capacity and therefore imports all her refined products from the international oil market through the Walvis Bay harbour and rails in lubricants as well from South African refineries and other sources.

Legal Framework controlling participants

Strategic petroleum products (petrol and diesel) are controlled by the following legislation:

Petroleum Products and Energy Act, 1990 (Act 13 of 1990), and the

Petroleum Products and Energy Amendment Act, 1994 (Act 29 of 1994)

Petroleum Products and Energy Amendment Act, 2000

Petroleum Products Regulations, 2000 : Petroleum Products and Energy Amendment Act, 2000

According to these Acts prices of the mentioned fuels are controlled, but prices of all other petroleum products are left to be determined by market forces. The retail prices of all petrol grades are gazette at each price adjustment but diesel prices are controlled only at the wholesale level and therefore are not gazette. The government plays no active part in the supply and distribution of petroleum products other than to control prices of petrol and diesel in an effort to enable the private sector to do business beneficial to the country as a whole. Imports are monitored by the Ministry of Mines and Energy while the Ministry of Trade and Industry issues the necessary import permits.

The Petroleum Products and Energy Amendment Act, 2000 amend the Petroleum Products and Energy Act, 1990, so as to grant more comprehensive powers to the Minister of Mines and Energy to make regulations ( Petroleum Products Regulations, 2000 ), more particularly relating to the import, supply, storage, possession and sale of petroleum products, the licensing of and conducting of business by wholesalers, resellers and consumer installation operators , the application of health, hygiene, safety and environmental standards and requirements, and minimum specifications as regards standards of facilities, structures and equipment and restrictions on the sale and use of petroleum products; to provide for reasonable and just contractual rules and principles in the petroleum industry; to provide for increased penalties for contravention in certain cases of the regulations and the Act; and to provide for incidental matters.

The Stakeholders / Major Players

The National Oil Company, NAMCOR, controls the exploration activities for oil and gas upstream by way of a bidding process while the international oil companies do the actual exploration. The Namibian government through the Ministry of Mines and Energy facilitates a privately run downstream oil business. At the moment there are five oil companies involved in the marketing of petroleum products in Namibia:

  • Puma Energy Namibia
  • Engen Namibia
  • Vivo Energy Namibia
  • Total Energies Namibia

Price Adjustment Mechanism


Determination outline and key factors

The determination of the 'new' Walvis Bay Basic Fuels Price (previously known as the 'Walvis Bay Landed Cost') for the fuels and grades concerned is made up of the following elements:

  • i. FOB fuel price, plus
  • ii. Freight (Worldscale to Walvis Bay + Coastal freight), plus
  • iii. Insurance, plus
  • iv. Demurrage, plus
  • v. Ocean Loss
  • vi. Wharfage charges

The following elements which were previously included in the 'old' Walvis Bay Basic Fuels Price formula, are now to be found 'below the line' in the slate calculation:

    1. Coastal storage
    2. Coastal Stock Financing Cost

Administration and determination of monthly BFP values (at Walvis Bay)

The administration of the BFP calculations is done jointly between the local Oil Industry Secretariat and the Ministry of Mines and Energy, in conjunction with other independent sources.
Essentially, there is one fuel price country-wide, which is the Walvis Bay price. Added to it is first the cost of delivering the product by rail to the eleven inland depot towns (Windhoek, Okahandja, Tsumeb, Keetmanshoop, Mariental, Grootfontein, Otjiwarongo, Karasburg, Otavi, Gobabis, Outjo).
Then the cost of road delivery from the depot towns to the respective destinations is added which may vary considerably from about a few cents per kilometer to more than 50 cents per kilometer as it is a function of distance, quantity and type of contractor. Claims on actual road deliveries are submitted by the oil companies to the Ministry of Mines and Energy for reimbursement within 14 days of such claims being received. Quarterly audit certificates on the claims are provided. All towns and localities supplied directly by road from Walvis Bay are excluded from the subsidy, as they do not incur the rail costs that other localities have to bear.

The information contained in this e-mail is confidential and may be subject to legal privilege and/or the subject of copyright. If you are not the intended recipient, you must not use, copy, distribute or disclose the e-mail or any part of its contents or take any action in reliance on it. If you have received this e-mail in error, please e-mail the sender by replying to this message. The Government of the Republic of Namibia shall not be held liable for any damages so caused to the unintended recipient and any unauthorized distribution by the unintended recipient.
Any views expressed in this message are those of the individual sender, except where the sender expressly, and with authority, states them to be the views of Government of the Republic of Namibia. Although this email has been checked for viruses and other defects, no responsibility can be accepted for any loss or damage arising from its receipt or use.