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S. Sudan to lift fuel subsidies

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February 10, 2017 (JUBA) - South Sudan Finance Minister, Stephen Dhieu Dau, said fuel subsidies will be scraped after Members of Parliament approved his request.

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People queue at a fuel station in South Sudan’s capital, Juba on 18 October 2014 (ST)

Fuel prices, which is fixed currently at 22 South Sudanese Pound (SSP) or about 20 United States cents a litre, will be determined by market forces of demand and supply. In the black market, a litre cost 100 SSP - a price expected in the aftermath of lifting subsidies.

Local media quoted Dhieu claiming that lifting fuel subsidies will "save money" for the government to narrow deficit gap of about USD 200 million.

Economic experts say fuel subsidies cost the government United $40 monthly. A liger of diesel or petrol is purchased at about $1 from East African countries and sold at 20% of the actual market price in Juba by state-owned NilePet company.

However, fuel is scarce in Juba and long queues that last several hours are common in Juba. It is not clear when the lawmakers recommendation will be implemented but economists are divided on the effects of the decision.

"South Sudan lack of hard-currencies will continue to inhibits private sector from importing fuel and hence fundamental problem of supply and demand won’t be resolved (sic)," writes economist Garang Atem, reacting to removal of fuel subsidies by the government.

Atem said prices of basic commodities such as food items and water will surge, further deteriorating the economic situation. He said NilePet will struggle to supply sufficient fuel, affecting the common man.

"Such reforms should be done in a comprehensive way so that compensation for public sector are reviewed," he said.

Other economists said the move is "excellent" and the subsidies were creating the black market because fuel dealers were creating scarcity.

(ST)

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  • 11 February 06:38, by Eastern

    This is the way to go! I hinted on this month’s ago that fuel subsidy by Kiir’s government is unsustainable as it benefits a few in his security and political circles. A litre of fuel in Juba can’t retail at just SSP 22. The cheapest for a litre of fuel in Juba should be at about SSP 120 plus. This is the reality those blinding singing Kiir’s praises will come to face soon. You can’t drain...

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  • 11 February 06:40, by Eastern

    The country’s meagre resources through waging a futile war and you expect the country to remain afloat. Now the international community should not respond to tha call for budget support. Let Kiir and his blind followers go to hell!

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    • 11 February 07:08, by nuer food lovers

      kiir and Riek macharare verystupid..butRiek have come to his sense by accepting to step aside..the ball is now in the court of Barh el gazal sultan kiir mayardid,the country is destroyed..they looted all the money..give the min.fin and CBK to upper Nile sons hoping they will come with miracles.intern comm must allowed comm in s,sudan to purchase their weapon to match this moron in barh el gazal ca

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  • 11 February 08:32, by Tilo

    It is simple, Give peace a chance, sustain the insecurity and stability,End the war and allow citizen to go about their normal duties. The cash you spent on Ammunition should be invest in Agriculture, reduce $ rate in central bank. Transparency and accountability should be introduced in gov’t system. Everything else will fall in place

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  • 13 February 08:29, by hamil

    You don’t need rocket science to understand that these fuel subsidies need to be removed. Some people argue that this could make the prices go higher. This is not a problem prices of commodities going higher in South Sudan is a normal routine. It is better to buy fuel expensively from a petrol station where it is available than buying little expensively from a black market which is unavailable.

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  • 13 February 08:53, by hamil

    When the Somalis were in charge of fuel supply in South Sudan, Juba rarely runs out of fuel every petrol station was always filled with fuel but when the JCE, Kiir and Malong dug their noses into that business everything turned on it’s head. I don’t mind buying a litre of fuel for 60 SSP instead of buying a 20 litre for 2200 SSP from the black market

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