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Sudan Ends Subsidies for Petrol and Diesel, Raises Prices

Sudan Ends Subsidies for Petrol and Diesel, Raises Prices

Wednesday, 9 June, 2021 - 05:00
Motorists queue up at a petrol station in the Sudanese capital Khartoum on January 21, 2014. (AFP)

Sudan fully liberalized petrol and diesel prices on Tuesday, according to a statement from the finance ministry that said previous prices would be canceled and gave new prices that it said were in line with import costs.


Sudan has been implementing aggressive IMF-monitored reforms in the hopes of turning around its economy and attracting debt relief and renewed financing.


The reforms have been painful and annual inflation climbed to 363% in April. Sudanese officials and the IMF have said the reforms, which included a sharp currency devaluation, would cause prices to rise and add to pressure on citizens, according to Reuters.


Tuesday’s move is the latest in a series of fuel price increases. The finance ministry said that going forward, prices would be determined by the costs of import as well as transportation, taxes, and profit margins.


The price of gasoline will rise from 150 Sudanese pounds ($0.35) per litre to 290 pounds, while the price of diesel will rise to 285 pounds per litre from 125 pounds, the finance ministry said.


The statement did not give pricing for domestically-produced petrol, which is typically supplied at a lower cost at specific stations.


The provision of direct subsidies to the agriculture, electricity, and transportation sectors “to compensate for the burden of rationalized fuel prices” would be studied, it added.


Fuel subsidies cost Sudan $1 billion a year and benefited the middle and upper classes rather than those with lower incomes, the finance ministry said.


“After the liberalization of prices, Sudan’s remain the 6th cheapest out of 42 African countries,” as many countries impose high fuel taxes, the statement said. Opponents of the reforms say their effects fall disproportionately on the poor.


Sudan continues to subsidize cooking gas and furnace oil, as well as wheat and medicines, although there are frequent shortages of those commodities. People wanting to fill their cars with gasoline or diesel must typically face long lines.


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