Page 5 - AfrOil Week 07 2020

AfrOil COMMENTARY AfrOil
 He told the press that the blockage appeared to have occurred because the crude loaded into the pipeline was too viscous and had not been properly blended with naphtha and the other chemicals necessary to keep it owing freely through the link.
e undersecretary also acknowledged the rumours of sabotage but did not dwell on them. According to SudaNow, he said that the ministry was looking into reports of irregularities at some of the wells that load oil into the pipeline but did not dwell on conspiracy theories.
New policies
Elsewhere, local o cials began taking steps to improve conditions on the fuel market.
For example, the governor of Khartoum State, Lieutenant General Ahmed Abdoun Hammad, ordered his administration to set up a special agency to handle both the ow of tra c and the distribution of motor fuel. He explained that the agency would draw personnel from existing administrative structures, such as the Ministry of Energy and Mining and public transportation concerns, as well as the transi- tional government and the local committees that led opposition to the previous regime.
Additionally, he said that one of the new agency’s primary tasks would be to ensure the regular and equitable distribution of fuel. To this end, he said, it will develop technical tools to ensure that drivers can only buy fuel at one ll- ing station and on one occasion each day – and that fuel sellers comply with restrictions on sales.
e governor made his announcement on
the same day that the Ministry of Energy and Mining set new operating hours for lling sta- tions in Khartoum State. On February 17, the ministry said it had ordered these stations to remain open 24 hours a day, seven days a week until the fuel shortages had been resolved. It also con rmed that it was xing the price of gasoline sold as such stations at SDP28 ($0.53) per litre.
Higher price caps
Going forward, the new price levels may help
resolve the supply situation.
One of the reasons why the fuel market has
been such a source of civil unrest is that Sudan’s transitional government inherited the previous regime’s policy of subsidising gasoline and diesel prices. Khartoum had been capping the price of gasoline at SDP6 (about $0.11) per litre, a rate far below market levels. (Diesel was also arti cially cheap, selling for the equivalent of $0.08 per litre.) Bringing the price up to SDP28 per litre should curb demand.
Additionally, it should relieve some of the strain on the transitional government’s nances. Under the old policy, Khartoum has been devot- ing about 36% of its revenues to fuel subsidies.
Yet there may be more trouble ahead, as prices are slated to rise further. Sudanese o - cials said earlier this year that they wanted to phase the subsidies out slowly, over a period of 18 months beginning in March. ey also said they wanted to replace these subsidies with direct payments in cash to impoverished citizens, but it remains to be seen whether this solution will appease consumers. ™
“ price caps should
relieve some of the strain on the transitional government’s nances
The new fuel
Oil from Sudan’s southern elds ows to Khartoum via pipeline (Image: EIA)
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