South Sudan government has decided to lift fuel subsidies, meaning the current fixed fuel price will be determined by market forces of demand and supply.
The country has been troubled by a wide fiscal deficit driven mostly by government spending and some subsidies.
South Sudan is an oil-producing country, but it doesn't have refineries so the government has been subsidizing imported fuel.
“The first resolution of the Council of Ministers today is lifting fuel subsidies,” Lily Albino Akol Akol, deputy minister of information said after the cabinet meeting in Juba today.
“The Council of Ministers noticed and acknowledged that the citizens of South Sudan are indeed suffering, and the fuel subsidy which was meant to alleviate the economic conditions of most of our citizens is not happening,” she added.
The deputy minister said her government resolved to cut spending on fuel subsidies, pointing out that lifting fuel subsidy would allow the government to use what it could save to meet other obligations, including payment of civil servants’ salaries on time.
“Lifting fuel subsidy will start immediately. The ministers of finance and petroleum as well as Nilepet have been directed to start lifting fuel subsidies with immediate effect,” she said.
She revealed that the minister of finance has been directed by the cabinet to prioritize the payment of civil servants’ arrears.
War-ravaged South Sudan hasn’t been able to pay soldiers and civil servants for several months and diplomatic staff abroad are being evicted over unpaid rent.