S. Sudan to phase-out of fuel subsidies

JUBA, Oct. 4 — The government of South Sudan is working on a
strategy to guide partial or total elimination of fuel subsidies, Minister
for Finance Stephen Dhieu Dau said on Sunday.

Scraping fuel subsidies will save money to cater for payment of salaries
for civil servants and encourage the private sector to invest in the oil
industry, Dau told Xinhua.Fuel subsidies costs the strife-torn east African
nation an estimated 183 million U.S. dollars a year. “Fuel subsidies are
undermining growth of the privates sector and are also a drain on public
finances,” Dau said. “The subsidies must be reduced or eliminated.”
“Removal or reduction of subsidies is the only viable way for us to meet
the government budgetary priorities and pay salaries on time,” he said.

South Sudan depends on oil export for 98 percent of its revenue, but
production has fallen significantly due to the civil war that erupted in
December 2013, shutting down most oilfields in the country’s oil-rich
northern region. The country now faces acute fuel shortage and
hyperinflation. A dearth of foreign reserves has also severely impacted its
import-dependent economy. – XINHUA