Sudan doubles fuel prices, fears of “catastrophic effects”

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ويشيش Sudan Very difficult economic conditions in light of the rise in foreign debt to more than 60 billion dollars and the collapse of most productive and service sectors during the 30-year rule of ousted Omar al-Bashir.

However, observers believe that the current transitional government, which took power after the fall of al-Bashir in April 2019, has not succeeded in addressing the severe living crises facing the ordinary citizen.

Government justifications

A government statement said that the decision comes within the framework of the state’s policy to reform National economy And the establishment of a structure that enables state institutions and the private sector to deal with international financial institutions.

According to the statement, the new prices are subject to the import cost, which constitutes between 71 percent to 75 percent of the fuel price, in addition to transportation costs, port fees, value-added tax and the profit margin of distribution companies, and these costs together constitute between 25 percent to 29 percent of the selling price. consumer.

At the current cost, it has been determined The price of a liter of gasoline The price of 290 Sudanese pounds (one dollar equals 430 pounds), and the price of a liter of gasoline at 285 pounds.

The statement indicated that the policy of liberating fuel will contribute to removing many distortions in the economy, as the state spends about one billion dollars annually in subsidies for fuel.

catastrophic effects

According to Muhammad Sheikhoun, professor of economics at Sudanese universities And a member of the Economic Committee of the Forces of Freedom and Change, that raising fuel prices by such a high percentage will have catastrophic repercussions on the average consumer.

Sheikhoun explains to Sky News Arabia that more than 60 percent of Sudanese They are currently living below the poverty line, and they will be more affected by this increase, which will be directly reflected in the cost of transportation, and thus the prices of basic goods and services.

He adds: “Before the increase, the consumer was suffering a lot in order to provide for his basic needs, and it is certain that the current increase will exacerbate the situation and make it worse.”

In the same context, economic analyst Wael Fahmy asserts that this huge increase in fuel prices will double the production costs of goods and services, and will therefore lead to a major collapse in many productive sectors, and then increase unemployment rates The widening of the poverty base in the country and an increase in the disruption of economic and social relations in the country.

My understanding indicates that most Fixed entry holders Owners of small and medium businesses will find it very difficult to survive in the market due to the expected significant decline in the purchasing power of the average consumer.

Fahmy told Sky News Arabia that the most serious impact of this increase will be to raise inflation rates, which are expected to reach 500 percent or more in the near term, compared to about 360 percent at the present time due to the high production and service costs.

Fahmy attributes the decision to increase to the measures that the government has been taking during the recent period to meet the requirements monetary fund And the World Bank and other financing institutions to reach the “decision point” required to forgive about 80 percent of foreign debt.

Confused consumers

A large number of Sudanese expressed their confusion and rejection of this increase, noting that they had endured the previous increases in the hope that they would reflect positively on the economic situation, but the opposite is what actually happened.

Fikri, a government employee, says that double fuel prices It would mean that his monthly wage of about 20,000 Sudanese pounds would be enough just to fill up enough fuel for his two-week delivery.

He adds, “This is a great paradox… How will I be able to provide for my other needs that require 5 times the salary? This is a real disaster.”

Another consumer, a middle-aged doctor, expresses greater concerns, and goes further than my thought has gone, telling Sky News Arabia: “This catastrophic increase will paralyze life … many employees and people with limited incomes will not be able to go to work, Either because they cannot afford the cost of fuel for their cars, or because they will not be able to keep up with the high cost of public transportation, which was already eating up most of the salary before the increase.”







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