November 23, 2016 (JUBA) – South Sudan lawmakers proposed on Wednesday that the country’s oil production be halted due to what they described as “inappropriate financial assistance” given to Sudan.
- A pipeline that transports crude oil from the south to Port Sudan (Reuters)
During deliberation on the 2016/2017 financial budget, lawmakers on South Sudan’s Parliamentary Committee for Finance said Khartoum takes the chunk of the revenue from oil and Juba must re-consider continued production.
“The Committee has observed with dismay that Sudan is taking 80.33% of the government total oil revenue! (…)The Government of the Republic of South Sudan is getting only 19.67% of its total oil revenue,” said Goc Makuac Mayol, the chairperson for Finance Committee in the Transitional National Legislative Assembly.
Reading through a list of recommendations from his committee, Mayol said what Juba pays its northern neighbour is in compliance with the September 2012 Agreement between the two countries.
“This is because GRSS [Government of the Republic of South Sudan] continues to provide the inappropriately designed Transitional Financial Assistance/Arrangement (TFA), which gives Sudan USD15/bbl. being transported through Sudan,” said the lawmaker.
“In this regard, it would seem to the committee that South Sudan would be better off if she were to shut down oil production than continuing with the current arrangement with Sudan,” he added.
Mayol backed his argument on South Sudan’s financial woes, by citing a fiscal gap of 47% said to be in the budget before parliament.
“South Sudan is currently facing a resource gap of 47% in the proposed FY2016/2017 and yet she is providing a financial assistance to Sudan. Payment to Sudan must not exceed 30% of GRSS’ crude oil entitlement,” stressed the lawmaker.
South Sudan, it was agreed in 2012, would and Sudan $24 per barrel of as pipeline fee and other tariffs. However, the fall in the price of oil means South Sudan is unable to fetch substantial revenue from oil.
The budget will be presented to Parliament for third and final [fourth] reading next week. If MPs incorporate the recommendation to shut down oil production, fiscal gap would wider, according to analysts.
Oil accounts for 83% of the SSP 29.6 billion budget before parliament.
South Sudan first halted oil production in 2012 over accusation that Sudan was “stealing” crude oil. Sudan, at the time, said it was confiscating quantities of oil equivalent to the tariffs for pipeline use.