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Thursday, 17 June 2021

Khartoum approves law imposing oil transit fees

North Sudanese FM reveals fees to be imposed on south's oil infrastructure

AFP , Thursday 21 Jul 2011
Omar Al-Bashir
Sudan President Omar Hassan Ahmad al-Bashir (Photo: Reuters)

Sudan on Thursday approved a law imposing fees on the south's use of its oil infrastructure, in an effort to offset the loss of oil revenues following southern secession on July 9,  Ali Mahmud, the finance minister,said."We are imposing these fees to get back what we lost from oil revenues, and we will reach the figure with the south through negotiations,"  Mahmud told reporters shortly after the law was passed by parliament alongside a new, post-secession budget.

"They have no way to export their oil, except through the north," he added.

On Wednesday, Mahmud said he expected Khartoum to receive around $2.6 billion from the oil-producing south in annual transit fees.

But negotiations on this, and other key outstanding issues that north and south have failed to resolve such as debt and borders, have yet to resume since they were suspended at the beginning of the month.

South Sudan's President Salva Kiir said on Tuesday that his government accepted the proposal of renting the north's oil infrastructure, but he hinted that Khartoum would have to make an acceptable offer or they would pursue other export options.

"We have agreed on one thing, that the oil issue should not be disrupted. They (north Sudan) need oil. But we fought for 21 years without oil, and we can still go for three years until we build our own oil infrastructure," Kiir told the independent Sudan Radio Service.

The secession of the south, where three-quarters of Sudan's 470,000 barrels per day of oil is produced, has aggravated the mounting economic difficulties facing Khartoum, by cutting an estimated 36.5 percent off its total revenues, according to the finance ministry.

Sudan's revised budget for 2011, which was ratified by parliament on Thursday, envisages an income of 23.3 billion Sudanese pounds ($6.5 billion), against government expenditure of 26.7 billion Sudanese pounds ($7.5 billion) and 18 percent inflation.

Khartoum plans to launch a new currency on Sunday, after the south did so earlier in this week, with the pound having plunged in value over the past six months, mainly due to the surge in commodity prices and weak state finances.

US economic sanctions and the country's huge foreign debt, estimated at around $38 billion, have choked the government's access to external loans.

Under an emergency three-year economic programme announced last month, Sudan's cash-strapped government plans to cut spending and widen the tax base.
Its new budget will leave food and fuel subsidies unchanged, but will impose a 30 percent tax on telephone calls.

Khartoum hopes to raise extra funds by boosting gold production and ramping up oil output, from 115,000 bpd now to 325,000 by 2018, according to the finance minister.

Mining Minister Abdelbaqi al-Jaylani said Sudan had sold 36.8 metric tons of gold between January and the end of May, mainly to Dubai, and that numerous companies were seeking to invest in the country's gold mining sector.

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