Namibia Turns to Vitol as N$1 Billion Fuel Cushioning Effort Takes Its Toll
By Anton Wokie
Government has defended its emergency fuel supply arrangement with international energy company Vitol, saying the agreement was made in the national interest and is aimed at shielding consumers from sharp fuel price increases expected in the coming months.
Speaking in Oshakati on Saturday, Minister of Industries, Mines and Energy Modestus Amutse dismissed claims circulating about the arrangement, describing them as misinformation and insisting that the deal was concluded transparently to protect both consumers and the economy.
“The welfare of the Namibian people is our first priority,” Amutse said, adding that government intervention became necessary following disruptions in the global oil market caused by geopolitical tensions in the Middle East.
According to the minister, Namibia has already committed more than N$1 billion to cushion consumers against rising fuel costs and maintain economic stability since international oil markets were affected by the conflict earlier this year.
Amutse revealed that the National Energy Fund, which had previously accumulated a substantial surplus, has seen those reserves nearly exhausted as government sought to absorb fuel under-recoveries and additional premiums charged above the Basic Fuel Price, “This situation could not be allowed to continue unchecked,” he said.
The minister stressed that the country is not facing a fuel supply crisis, but rather a cost crisis. “Our fuel is available, and it will remain available. It is an emergency of cost,” he said, warning that without intervention, fuel prices could increase sharply from July, affecting transport costs, food prices and other basic commodities. Government said it engaged neighboring countries, diplomatic missions, local fuel industry players and international suppliers in search of affordable fuel supplies that would not require additional state subsidies.
According to Amutse, consultations were also held with members of the Namibian Oil Industry Association, during which government outlined plans to consolidate Namibia’s fuel requirements in order to benefit from economies of scale and eliminate premiums added above the Basic Fuel Price. He said several proposals were received from both local and international suppliers.
However, government selected Vitol because its offer met the country’s entire fuel requirement without charging additional premiums and without requiring public funding. “What set the offer from Vitol apart was that it met the country’s fuel requirement in full: fuel supplied at the Basic Fuel Price, with no premium added on top and no public money required,” Amutse explained.
Other bidders, he said, attached conditions such as financial guarantees and assurances. The minister further disclosed that government is finalizing Bulk Petroleum Import Coordination Regulations, which would allow the state to coordinate all petroleum imports into Namibia. He said the reforms were agreed to in principle by industry stakeholders in 2023 and are expected to come into operation by the end of September 2026.
According to Amutse, the current Vitol arrangement serves as a temporary measure while government prepares to implement the new import coordination system. He noted that a similar model is already operating successfully in Tanzania and has been studied by Namibian authorities, should global oil market conditions remain volatile, government indicated it may invite suppliers to participate in future fuel procurement rounds under the same framework.
Amutse rejected suggestions that there was anything improper about the Vitol arrangement, maintaining that the agreement was concluded transparently and solely to protect consumers from potentially severe fuel price hikes. “There is nothing improper in the arrangements the Government has made to secure our fuel supply for the period July to September 2026,” he said.
The minister urged the public to rely on verified information and encouraged anyone seeking clarity on the fuel supply arrangement to engage directly with the ministry.
