TIRI MASAWI
The Motor Vehicle Accident Fund (MVA Fund) will lose N$24 million in monthly income after the Government reduced fuel levies by 50%.
The Government levies, added on litres of petrol and diesel to fund institutions such as the MVA Fund, were reduced from 1 April as fuel prices rose. Petrol increased by N$2.50 and diesel by N$4, driven by tensions between the United States of America and Iran that disrupted shipments through the Strait of Hormuz, a key global oil passage route.
MVA Fund chief executive officer Rosalia Martins Hausiku confirmed to Namibia Business Review last week that the company’s finances will be affected by the reduced fuel levies.
“The company normally collects about N$48 million per month from the fuel levy at a rate of 47.7 cents per litre, while its monthly claims expenses amount to N$31 million,” she said.
The MVA Fund supports people injured in road accidents and families of those who die in crashes. It is funded through a fuel levy added to every litre of petrol or diesel, which is its main source of income.
“This leaves only N$17 million to cover operational and capital expenditure. The 50% fuel levy reduction results in a monthly revenue of N$24 million at 23.85 cents per litre, whilst our monthly claims expenditure remains at N$31 million, notwithstanding other obligations. Over a three-month period, the required revenue shortfall to fully cover our monthly obligations will therefore accumulate to N$74 million. While this represents a notable decrease in inflows, the measure is understood within the broader context of national economic relief efforts and the need to balance fiscal sustainability with social protection,” she said.
She said they recognise that the decision is a necessary intervention to ease the burden of rising fuel prices on the consumer by cushioning them from escalating costs of basic goods and services.
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