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Sunday, 15 September 2019

Sudan faces fuel crisis and worsening cash crunch

Reuters , Saturday 4 May 2019
Vehicles line up for gasoline at a gas station in Khartoum, Sudan, May 4, 2019 (Photo: Reuters)
Views: 1575
Views: 1575

Sudan is facing a pre-Ramadan fuel crisis and a worsening cash crunch less than a month after president Omar al-Bashir was ousted following protests sparked by bread and fuel shortages.

Cars queued at almost every petrol station in Khartoum on Saturday as motorists waited for fuel for several hours. Soldiers manned the stations to ensure order.

The crisis, along with a cash shortage and electricity outages, pose challenges to the country's ruling Transitional Military Council (TMC), set up after generals deposed Bashir and arrested him on April 11.

The TMC is locked in a standoff with the opposition over who will control a proposed joint civilian-military body to oversee the country until elections can be held. Protests have continued in a bid to push the council to cede power to civilians.

At least a dozen ATMs in a commercial area in central Khartoum had no cash, and dozens of people lined up at those still dispensing money. A Reuters witness counted 88 customers in one line on a main road in central Khartoum.

Queues had previously been shorter and more ATMs held cash.

"I am searching since the morning for an ATM to withdraw cash from," said Ahmed Yassin, 52. "I have been standing in line for three hours and I must withdraw so that I can buy Ramadan needs for my family."

One banking employee, who declined to be named, said most ATMs held no cash.

Most Sudanese employees get paid near the beginning of the month, and consumer spending often increases during the Islamic month of Ramadan, likely to begin on May 6, contributing to the liquidity crisis.

The maximum daily withdrawal has long been set at 2,000 Sudanese pounds ($45). Some have set up several bank accounts to try to circumvent the limit.

Most residential areas in the capital experience near-daily electricity outages for hours. The increasing blackouts occurred as Khartoum's temperatures soar to highs of 45 Celsius.

Bashir's government had run up enormous budget deficits by subsidising fuel, bread and other products. To cover the deficit, it expanded the money supply.

But that served to debase the currency, causing inflation to rise and the value of the Sudanese pound against other currencies to plummet - in turn pushing up the cost of subsidies and widening the deficit even further.

Attempts to raise bread and fuel prices to reduce the cost of subsidies sparked the protests that led to the military's overthrowal of Bashir last month. 

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