Sudan may introduce new cuts on fuel subsidies
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June 23, 2013, (KHARTOUM) - The Shura (consultative} council of the
ruling National Congress Party (NCP) has endorsed a proposal to lift
subsidies further on petroleum products, an informed source told Sudan
Tribune today.
JPEG - 25.2 kb
A worker fills a pickup truck’s tank with blended fuel at the first
blended fuel station at Kenana Sugar Company (KSC)’s main plant, 270
km (170 miles) south of Khartoum May 14, 2013. (REUTERS/Mohamed
Nureldin Abdallah)
The source said that the increase in prices will be applied in phases
on two grades of fuel.
At the NCP Shura Council meeting on Friday, president Omer Hassan
al-Bashir hinted to the move in his speech saying that subsidies on
fuel and electricity benefit the rich for the most part.
"Any family with more than a single vehicle gets more subsidies than
the salary of the Deputy Minister," Bashir said.
The source further revealed that Sudan’s 2nd Vice President al-Haj
Adam Youssef told NCP women meeting that increasing fuel prices is
inevitable after state failed to get alternatives to plug the budget
hole.
VP Youssef said the measure will take effect in the coming days but he
also acknowledged that women will bear the brunt of the price
increases that will ensue.
Following the independence of South Sudan in July 2011, Khartoum was
forced to introduce a contractionary budget that saw the partial
lifting of fuel and food subsidies which triggered rare but small
demonstrations across the country.
The government defended the measures saying that the country can no
longer afford to pay for these subsidies after losing 75% of the oil
reserves that are now in South Sudan territory.
Khartoum and Juba signed an agreement last March that will allow
landlocked South Sudan to resume transporting its oil through Sudan’s
pipelines after suspending it for more than a year in a row over
transit fees.
Sudan will receive a fixed fee for every barrel of oil exported but
nonetheless Khartoum said that it will continue with plans to lift
subsidies.
“Maybe every month we can remove a little bit, half a pound or a
pound,” finance minister Mahmood Abdel-Rasool told Reuters last April
adding that the subsidies - which make up around 12 percent of state
spending - should be fully removed by mid-2015.
(ST)
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