Sudan ends fuel subsidies in IMF-backed reform, wary of social impact

The decision, issued by the finance ministry late Tuesday, saw the price of petrol shoot up from 150 to 290 Sudanese pounds per litre (35¢ – 68¢), while diesel went up from 125 to 285 pounds.
Wednesday 09/06/2021
A driver gets fuel at a petrol station in Khartoum, Sudan. (REUTERS)
A driver gets fuel at a petrol station in Khartoum, Sudan. (REUTERS)

KHARTOUM – Sudan has scrapped fuel subsidies as part of an IMF-backed reform programme, state media reported Wednesday, doubling pump prices at the risk of stoking popular discontent.

The decision, issued by the finance ministry late Tuesday, saw the price of petrol shoot up from 150  to 290 Sudanese pounds per litre (35¢ – 68¢), while diesel went up from 125 to 285 pounds.

“The prices will be subject to periodic review according to the dollar’s indicative price,” the state SUNA news agency reported.

The move will allow Sudan’s government “to establish a mechanism for state institutions and the private sector to deal with international financial institutions,” SUNA said.

It quoted the ministry as saying “the much-delayed” measure would save the government $1 billion a year and allow it to address “distortions to the economy”.

It is the latest in a package of economic reforms that Sudan’s transitional government promised to implement under an agreement it struck with the International Monetary Fund last year.

It has also carried out a managed float of the Sudanese pound to stem a rampant black market.

Before the ouster of longtime president Omar al-Bashir in April 2019, the economy was crippled by US sanctions and sapped by huge military spending on multiple conflicts in Sudan’s far-flung regions.

The country’s economic woes were the driving force behind the mass protests that led to Bashir’s overthrow in a palace coup by the army.

More than two years on, many Sudanese still queue for hours to buy petrol or food. Households suffer from frequent power cuts, while bottles of cooking gas are often hard to find.

The transitional government hopes the tough reforms it is adopting will help it qualify for an IMF debt relief initiative that would settle its $60 billion debt.

It also hopes it can  implement them fully without sparking destabilising unrest across the country.