Sudan may introduce new cuts on fuel subsidies
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.
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)