November 3, 2016 (KHARTOUM) - Sudanese government on Thursday scrapped fuel subsidies and increased electricity price in a bid to stop the surge in inflation and control the fall of Sudanese pound in the black market.
The move, which takes effect at midnight local time on Thursday, comes as part of a series of austerity measures to reduce the trade deficit following the collapse of oil prices and as the economy of east African country is already affected by the U.S. economic sanctions.
In a press conference held on Thursday evening, Finance and Economic Planning Minister Badr al-Din Mahmoud announced the liberalization of fuel prices removing a subsidy that will allow his government to reduce its expenditures and save hard currency reserves.
Accordingly, the price of gasoline will rise to 6.17 pounds per litre, (27.5 per gallon) while the litre of diesel will rise to 4.11 pounds (18.8 pounds per gallon).
The government also, increased electricity tariff for consumers of more than 400 kilowatts, it order to not affect low-income households who are classified as low energy users.
In September 2013 following the government’s decision to lift fuel subsidies, demonstrations broke out in several Sudanese states. Rights groups said that at least 200 people were killed but the government put the death toll at 85.
The full drop of fuel subsidies was announced after a recent briefing by President Omer al-Bashir to the Shura Council of the ruling National Congress Party where he said the government has no choice but take these tough economic measures.
The new austerity plan was endorsed by the government in a meeting of the cabinet chaired by President al-Bashir earlier during the day.
In its weekly meeting, the Council of Ministers also decided to increase salaries by 20%, as part of the government measures to support low-income families and reduce poverty.
In press statements after the cabinet meeting, Mahmoud said salaries and per diems will be increased by 20%, increase the spending on social security, employees will receive one-month salary bonus to cover the needs of Eid al-Fitr and a two-month salary bonus for Eid al-Adha.
Additional allowances are decided in favour of public employees to cover fees of wearing and meals. Also retreat pensions will be increased.