Mines and Energy Minister Modestus Amutse has stated that the global oil company Vitol is not required to obtain a local operating licence, as it already has agreements in place with various Namibian entities and was legally appointed.

Amutse responded in the National Assembly to accusations by AR Leader Job Amupanda that the Ministry of Mines and Energy awarded the Swiss-based global oil company an exclusive fuel supply deal despite it not being licensed in Namibia.

Global commodity trader Vitol was granted an exclusive contract to be the sole supplier of Namibia's petroleum products from July to September. The emergency arrangement was established to protect consumers from global fuel price shocks and save the state millions. However, Professor Amupanda said the deal is not in line with the Petroleum Products and Energy Act.

"Regulation 14(1)(e) says that one of the conditions for the wholesale licence is that all the relevant import and export licences for wholesale should be obtained before the supply of fuel to Namibia," he said. "So, it basically means that you must have a wholesale licence. And once you have that wholesale licence, before you could even import fuel into Namibia, you must have received all the necessary approvals."

Responding to the allegations, Amutse stated that Vitol is an international supplier and does not require a licence, as they have agreements with licensed Namibian institutions, wholesalers and retailers.

"There is only one Vitol, having an administrative office in South Africa and registered as Vitol Bahrain. Vitol has been supplying the industry as an international supplier for a long time. Some local wholesalers have agreements to have Vitol supply them with products, and the agreements are still valid. It has been supplying four wholesalers for a long period. For Vitol to supply petroleum products to the Namibian market, they do not need a licence because the minister licenses wholesalers and retailers who do business within the boundaries of Namibia, whether they import or export."

Amutse also stated that other industry players do not contest the decision to grant Vitol the sole supply mandate.

"The suppliers do not have a problem; it was a submission made by themselves. The government only activated what the industry players wanted. We had meetings where we discussed the issue. I see no legal issues with the arrangements. The route we are going down, bulk fuel supply replaces prems, which allows for payment of the basic fuel price."

The Mines and Energy Ministry stated that Namibia is saving a total of one billion dollars by granting Vitol the exclusive deal.