Namibia has selected TotalEnergies to supply the country’s bulk diesel and petrol needs for a three-month period from November 2026 to January 2027, in a deal that will save the government approximately N$220.5 million (US$13.57 million) compared to the current supply arrangement.

Industries, Mines and Energy Minister Modestus Amutse announced on Monday evening that the TotalEnergies bidding group emerged as the successful bidder in the government’s latest bulk petroleum import tender, with its trading company TOTSA designated as the supplying member.

A SHIFT TOWARDS COMPETITIVE PROCUREMENT

The new contract marks a significant departure from Namibia’s previous fuel procurement model. The Southern African country announced earlier in September that it would not renew an exclusive fuel supply agreement with global commodities trader Vitol, which had been extended through October.

Under the new arrangement, TotalEnergies will supply approximately 345.3 million litres of fuel in total, comprising 246.9 million litres of diesel and 98.4 million litres of petrol. Diesel accounts for nearly three-quarters of the contracted volume, reflecting Namibia’s heavy reliance on diesel for transport and industry.

The winning bid offered a 61-cent-per-litre discount on diesel and 71 cents per litre on petrol, according to the ministry. Weighted according to the volumes Namibia expects to import, the average discount works out to 63.85 cents per litre.

“The ministry will continue to use open competition to buy the country’s fuel on the best possible terms without ever putting security of supply at risk,” Amutse said in a recorded video message.

FROM PREMIUM TO DISCOUNT

The competitive tender process has delivered a remarkable turnaround in Namibia’s fuel procurement costs. According to Amutse, Namibia had paid suppliers a premium above the Basic Fuel Price (BFP), the official reference price for imported fuel, for years.

“For years, Namibia paid more than the Basic Fuel Price to have its fuel supplied: suppliers charged a premium on top of that benchmark,” Amutse said. “In the last supply round, the Ministry removed that premium entirely: fuel was supplied at the BFP itself, with nothing added”.

The latest tender has pushed procurement costs below that level. In an unusual result, all four companies that submitted bids offered to supply Namibia below the BFP, with none seeking a premium above the benchmark.

SAVINGS TO STABILISE PUMP PRICES

The ministry said the savings will not be paid directly to motorists but will flow into the national fuel price account, known as the slate, which is managed through the National Energy Fund.

Strengthening the slate gives the ministry greater room to manage fluctuations in international fuel costs and help maintain stability in domestic pump prices. The announcement therefore does not mean petrol and diesel pump prices will automatically fall by 61 cents and 71 cents respectively in November, as retail fuel prices incorporate several other components.

TOTALENERGIES’ GROWING NAMIBIAN PRESENCE

The fuel supply contract adds a downstream component to TotalEnergies’ existing upstream presence in Namibia. The French energy company is currently negotiating fiscal stability terms with the Namibian government ahead of a final investment decision on its Venus offshore oil project, as the country aims for its first oil production by 2030.

Namibia’s fuel supply market includes state-owned Namcor, TotalEnergies, Vivo Energy (Vitol), Puma (Trafigura), and newcomer Nasan Energies.