Sudan Ends Fuel Subsidy

Sudan has fully liberalized gasoline and diesel prices, according to a statement from the finance ministry, the previous prices would be canceled and new prices has been given 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.

The finance ministry said going forward prices would be determined by the costs of import as well as transportation, taxes, and profit margins.

The finance ministry disclosed that 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 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 remains the 6th cheapest out of 42 African countries,” as many countries impose high fuel taxes, 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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