Sudan to Tackle Fuel Subsidies as Economy Hangs on Edge

In this Sunday, Jan. 28, 2020 photo, Ibrahim Elbadawi, Sudan's interim minister of finance, speaks in an interview in Khartoum, Sudan. (AP)
In this Sunday, Jan. 28, 2020 photo, Ibrahim Elbadawi, Sudan's interim minister of finance, speaks in an interview in Khartoum, Sudan. (AP)
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Sudan to Tackle Fuel Subsidies as Economy Hangs on Edge

In this Sunday, Jan. 28, 2020 photo, Ibrahim Elbadawi, Sudan's interim minister of finance, speaks in an interview in Khartoum, Sudan. (AP)
In this Sunday, Jan. 28, 2020 photo, Ibrahim Elbadawi, Sudan's interim minister of finance, speaks in an interview in Khartoum, Sudan. (AP)

Sudan hopes to cut fuel subsidies over the course of 18 months, starting as early as March, and replace them with direct cash payments to the poor, the country’s finance minister said Wednesday, laying out a timetable for sweeping economic reforms sought by international lenders.

The plan comes as Sudan's fragile democracy is slowly taking shape after the ouster last year of the country's long-time president Omar al-Bashir.

In an interview with The Associated Press, Finance Minister Ibrahim Elbadawi said the decision was a “no brainer." The government has previously said it will not change bread and flour subsidies.

Elbadawi's comments — the first to reveal a planned timeline — came after the Sudanese government skirted the issue of slashing subsidies late last year, after the country's pro-democracy movement rejected the move, and instead included them in the 2020 budget.

In the interview with the AP, Elbadawi said the plan now is to gradually lift fuel subsidies, which take up 36% of the nation's budget, as early as March and following an economic conference with civil society groups, and continue into the next year.

A former World Bank economist, Elbadawi was appointed to the country's interim government last year. He said gasoline subsidies would be removed first, before tackling those related to diesel in mid-year.

Sudan's new leadership is navigating a treacherous transition to civilian rule. Two-thirds of the country's more than 40 million people live in poverty, and slashing the fuel subsidies could lead to destabilizing protests reminiscent of the large-scale demonstrations that ended Bashir's 30-year rule in April. At the same time, sweeping economic reforms are required to re-integrate Sudan into the international economy and win support from international lenders.

Since Bashir's ouster, an interim government made of civilian and military representatives has been leading the country and the economy — already in a severe downturn and battered by a weakening currency, shortages and inflation — has become the lynchpin of the fragile transitional period.

Sudan has been an international pariah after it was placed on the United States' list of states that sponsor terror, more than two decades ago. This largely excluded it from the global economy and prevented it from receiving loans from international institutions like the International Monetary Fund.

Sudan's interim government has also inherited a debt of 60 billion dollars and a rapid inflation rate, and badly needs an injection of funds from foreign donors. The nation's currency, the Sudanese pound, is trading on the black market for double its official rate of 45.3 pounds to the dollar.

The uprising against Bashir began as protests over rising prices of key staples such as bread and frustration among the youth over unemployment and the brutality of the nation's security forces. Many in the country’s civil society movement fear that lifting subsidies now could make the country's most vulnerable even poorer.

Elbadawi said a direct cash payment to poor families, through banks or mobile phone transfers, could help ease the shock of the reforms. Such a program could be off the ground in six months, he said, though the government still needs better data to reach all those in need. As part of a pilot group, some 4.5 million people would start receiving the money soon, he added.

"We think that if we manage to do this, it will be a very viable and credible alternative," he told the AP. "It will target the poor, it will promote the cause of peace and it will actually change the social contract."

Because of the longstanding subsidy program, Sudan has been one of the cheapest countries in the world to fill up a tank. Cheap gasoline prices have also encouraged fuel smuggling out of the country. If things were to stay as they were — with no changes to the 2020 budget — the government would be spending more on subsidies than on health, education and internal security combined, Elbadawi said.

To pave the way for international loans, Sudan has been in talks with the US to remove it from the list of terrorism sponsors —something Elbadawi hopes will be only a matter of weeks or a few months. In the meantime, he said the government is in talks with the IMF and is working on a reform program that could lay the groundwork for future debt relief.

The government is also launching a national dialogue to explain the necessity of the subsidy reforms but will tread carefully, aware of likely popular opposition, Elbadawi said. The Sudanese Professionals Association, the main organizer of demonstrations during last year's uprising, has threatened to mobilize protesters if the transition goes astray.

That means Sudan's civilian stakeholders would have to be on board with the program.

“If, for whatever reason, we are unable to reach a consensus, then I think it will be incumbent upon the government to explain the consequences and to allow the Sudanese people to take whatever decision and course they want to take,” Elbadawi said.



Saudi Arabia Drives September Surge in OPEC+ Output Despite Iran War Disruptions

An oil tanker at Ras Al-Khair port, north of Dammam, in 2019. REUTERS
An oil tanker at Ras Al-Khair port, north of Dammam, in 2019. REUTERS
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Saudi Arabia Drives September Surge in OPEC+ Output Despite Iran War Disruptions

An oil tanker at Ras Al-Khair port, north of Dammam, in 2019. REUTERS
An oil tanker at Ras Al-Khair port, north of Dammam, in 2019. REUTERS

OPEC+ crude output surged in September as Saudi Arabia ramped up production, despite continued disruption to oil shipments through the Strait of Hormuz caused by the Iran war, OPEC said in its monthly report on Tuesday.

The Organization of the Petroleum Exporting Countries raised its forecast for global oil demand growth in 2027 to 2.55 million barrels per day (bpd) from 2.36 million bpd, citing the need to replenish inventories depleted by war-related supply disruptions.

But it cut its demand growth forecast for this year for a sixth straight month, to 180,000 bpd from about 380,000 bpd in its August estimates.

OPEC+, which groups OPEC members and allies including Russia, pumped an average of 39.068 million bpd in September, up 903,000 bpd from 38.165 million bpd in August, the report showed.

Output has risen by about 1.36 million bpd since July, when it stood at 37.710 million bpd, according to the secondary sources OPEC uses to track production.

OPEC members drove the increase, raising output by about 920,000 bpd to 25.097 million bpd from 24.177 million bpd a month earlier. Production by participating non-OPEC countries fell by about 18,000 bpd.

Saudi Arabia leads surge

Saudi Arabia posted the alliance's largest production increase. Output climbed to 8.372 million bpd in September from 6.238 million bpd in August, a gain of more than 2 million bpd, according to figures the kingdom submitted to OPEC.

The increase comes as Saudi Arabia seeks to restore oil flows and strengthen the resilience of its exports against war-related disruptions. Aramco increased oil loadings at Gulf export terminals in September after an attack on the East-West pipeline disrupted shipments through the Red Sea.

Inventory rebuilding to support demand

OPEC expects global oil demand to rise by 2.55 million bpd in 2027 to average 108.3 million bpd, compared with 108.19 million bpd in last month's forecast.

The forecast assumes demand growth in 2026 will slow as currently expected, with the need to replenish depleted inventories supporting growth next year, OPEC said.

For 2026, the group expects demand growth of just 180,000 bpd. It also cut its fourth-quarter demand estimate to 107.73 million bpd from 107.85 million bpd in last month's report.

Demand in countries belonging to the Organisation for Economic Co-operation and Development is forecast to shrink by about 210,000 bpd this year, while demand in non-OECD economies is expected to grow by 390,000 bpd.

Oil supply from outside OPEC+ is forecast to grow by 640,000 bpd in 2026 and 620,000 bpd in 2027.

Russian output declines

Russian oil output fell by 38,000 bpd in September to 8.643 million bpd, the report showed, amid continued Ukrainian strikes on Russian energy infrastructure, including refineries.

Russian Deputy Prime Minister Alexander Novak said the country would trim oil production this year. Russia's Economy Ministry lowered its 2026 output forecast to a 17-year low amid the war with Ukraine.

Kazakhstan's production rose by 22,000 bpd in September to 1.851 million bpd, according to the OPEC report.


From Hydrogen to AI, Energy Leaders Map the Sector’s Global Future

A panel discussion examines challenges and opportunities at the World Petroleum Congress in Riyadh (Asharq Al-Awsat)
A panel discussion examines challenges and opportunities at the World Petroleum Congress in Riyadh (Asharq Al-Awsat)
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From Hydrogen to AI, Energy Leaders Map the Sector’s Global Future

A panel discussion examines challenges and opportunities at the World Petroleum Congress in Riyadh (Asharq Al-Awsat)
A panel discussion examines challenges and opportunities at the World Petroleum Congress in Riyadh (Asharq Al-Awsat)

Green hydrogen, artificial intelligence and strategic partnerships took center stage at the World Petroleum Congress in Riyadh, as sessions mapped the energy sector’s future amid rapid technological and industrial change.

Progress on clean energy projects, led by the NEOM Green Hydrogen Project, now 96% complete, intersected with the challenge of cutting emissions from transport, which accounts for about 30% of global energy demand.

The discussions highlighted a widening agenda: developing energy sources and reshaping how energy is produced and used to improve efficiency and sustain supplies.

Saudi Aramco said it plans to increase gas sales by 80% by 2030 compared with 2020 and 2021 levels, and to build and start operating six to seven gas and liquefied gas facilities between 2025 and 2027.

Decarbonization

Transport and logistics account for about 30% of global energy demand, Saudi Vice Minister of Transport and Logistics Services Rumaih Al-Rumaih told a conference session.

Decarbonization is a long journey that requires a broader energy mix, he said, stressing the need for available, reliable, affordable and safe supplies.

The Saudi Green Initiative provides a framework for reaching net-zero emissions by 2060, with transport playing a major role, Al-Rumaih said.

Saudi Arabia is expanding public transport and cutting urban emissions to meet its commitments, he added. The Riyadh Metro network spans 187 kilometers and has 85 stations.

Green hydrogen

National Development Fund Governor Abdulaziz Al-Arifi said the fund had provided financing and strategic support for the NEOM Green Hydrogen Project alongside local banks and other entities and organizations.

That support helped advance one of the clean energy sector’s leading projects, strengthening investment opportunities and local content, he told the conference.

ACWA Power Chairman Mohammad Abunayyan said local resources, knowledge and expertise accounted for about 90% of those used in new projects. He reaffirmed the company’s commitment to expanding investment and overcoming challenges on the ground in major global markets such as China.

At the same session, Saudi Aramco Executive Vice President of Gas Abdulkarim Al-Ghamdi discussed operational readiness and supply chains.

Resource localization under the company’s iktva program had reached levels ranging from more than 75% to 90%, he said, offering strong protection against external disruptions.

Saudi personnel and technological integration are the two pillars of sustained gas-sector growth and future resilience, he said.

Artificial intelligence

A panel at the 25th World Petroleum Congress explored how energy powers artificial intelligence, how the two sectors interact and how AI can sharpen decisions, improve operations and raise energy efficiency.

Speakers said development of the energy and electricity sectors under Vision 2030 aims to meet demand and attract investment, including in AI data centers that need reliable, competitively priced electricity.

The approach involves anticipating sectors’ needs and connecting them with investors. Speakers stressed the need to integrate infrastructure, data, technology and human expertise, drawing on Saudi Arabia’s strengths to develop solutions and bring them to global markets.

Smart meters

AI can improve forecasts of electricity loads and demand and detect grid faults early, helping planners respond faster, speakers said.

Smart meter data can track consumption, forecast bills, show electricity use by appliance and flag unusual usage.

In oil and gas exploration and resource development, particularly drilling, AI can analyze data in real time and combine engineering models with geological information.

This can speed up decisions, improve accuracy, shorten the gap between planning and execution, enhance safety and support risk assessments and investment decisions.

To expand these applications, companies must deliver tangible business value and integrate the tools into operations, speakers said.

They must also ensure data quality and timely collection, train personnel to assess outputs and keep people involved in final decisions, while using digital tools to reduce risks.


IMFC Extends Aljadaan's Term as Chair by One Year

Saudi Arabia's Finance Minister Mohammed Al-Jadaan speaks during a press briefing following a meeting of the IMFC (International Monetary and Financial Committee) at the 2026 IMF and World Bank Group Spring Meetings in Washington, DC, on April 17, 2026. (Photo by Kent Nishimura / AFP)
Saudi Arabia's Finance Minister Mohammed Al-Jadaan speaks during a press briefing following a meeting of the IMFC (International Monetary and Financial Committee) at the 2026 IMF and World Bank Group Spring Meetings in Washington, DC, on April 17, 2026. (Photo by Kent Nishimura / AFP)
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IMFC Extends Aljadaan's Term as Chair by One Year

Saudi Arabia's Finance Minister Mohammed Al-Jadaan speaks during a press briefing following a meeting of the IMFC (International Monetary and Financial Committee) at the 2026 IMF and World Bank Group Spring Meetings in Washington, DC, on April 17, 2026. (Photo by Kent Nishimura / AFP)
Saudi Arabia's Finance Minister Mohammed Al-Jadaan speaks during a press briefing following a meeting of the IMFC (International Monetary and Financial Committee) at the 2026 IMF and World Bank Group Spring Meetings in Washington, DC, on April 17, 2026. (Photo by Kent Nishimura / AFP)

The International Monetary and Financial Committee (IMFC) of the International Monetary Fund (IMF) announced a request for a one-year extension of Saudi Finance Minister Mohammed Aljadaan's term as Committee Chair after his current term ends on January 3, 2027.

The move aims to ensure continuity in the Committee's work and maintain momentum in advancing its key priorities, including important ongoing reforms.

In a statement issued Tuesday, the IMF said Committee members had asked Aljadaan to extend his term as Chair for an additional year and that he had agreed. Aljadaan was selected to chair the Committee for a three-year term beginning January 4, 2024.

Committee members expressed appreciation for Aljadaan's leadership, saying the extension would help ensure continuity and sustain momentum in addressing the Committee's key priorities, including its efforts on important ongoing reforms.

The IMFC is the primary policy advisory body of the IMF's Board of Governors and comprises finance ministers and central bank governors. It deliberates on major policy issues facing the Fund and the international monetary and financial system.

The Committee has 25 members, reflecting the composition of the IMF's Executive Board. Each member country, or group of member countries that elects an Executive Director to the Board, appoints a representative to the Committee.

The IMFC normally meets twice a year, once during the Spring Meetings and again in the fall, alongside the Annual Meetings of the IMF and World Bank Group.