South Sudan's fuel shortage is caused by a lack of refineries, according to the head of the government owned oil producer Nilepet. A leading South Sudanese economist however said the fuel shortage was a result of South Sudan's currency crisis.

In recent months, South Sudan has been hit with a crippling fuel shortage, which have rendered South Sudan's main export all but worthless. Drivers have been waiting for petrol in queues that spanned kilometers, and many buy fuel on the black market for triple the previous prices.   

“The issue of fuel shortage will not go away without establishing our own refineries in the country. If we had our own refineries, then this issue of fuel shortage would not have a recurring matter. But because of the lack of refineries the issue of fuel shortage will continue to be one of the issues which the energy sector will always have to deal with. It will continue to be a recurring matter”, said the head of Nilepet, Machar Ader in an interview on Wednesday.

Santino Garang, a South Sudanese based in the United States with economics and financial studies background, said the fuel shortage is caused by a currency crisis. Oil importers receive unfavorable exchange rates due to the recent devaluation of the South Sudanese pound, Garang said, in addiiton to the decline in the foreign exchange earnings of the government.

In December, South Sudan devalued its currency from 3 SSP per American dollar to a managed float. Currently, one American dollar is worth roughly 33 SSP on the black market. 

In the past year, the price of oil has also plummeted on the global market, crippling the value of South Sudan's main export. 

According to Garang, the shortage of foreign exchange reserves, coupled with low oil prices has meant the government cannot subsidize fuel.