South Sudan pushing for $0.41 per barrel in oil transit fees
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August 17, 2011 (KHARTOUM) – The Republic of South Sudan (RSS) will
offer Khartoum less than half a dollar in transit fees for each barrel
of oil produced that passes through the pipelines running through the
territories of the North.
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South Sudan’s minister for peace Pagan Amum (AFP)
With the independence of South Sudan last month as part of the 2005
peace deal that ended more than two decades of civil war, the North
has lost 75 percent of the country’s oil production of 500,000 barrels
a day.
But the landlocked South relies on the infrastructure that resides in
the North to export its oil through the Red Sea port in Port Sudan.
The RSS minister for Peace Pagan Amum told the independent Al-Ahdath
newspaper that he expects South Sudan to pay $0.41 to the North
stressing that the benchmark will be international norms. He cited the
case of Chad-Cameroon pipeline which is of a similar-length.
However, one observer told Sudan tribune that the comparison is not
realistic noting that the waxy nature of oil produced in South Sudan
means that it requires special treatment. He said that a fair price
would be somewhere between $5-$10.
Sudan has reportedly asked for $32 per barrel for the service,
something which South Sudan immediately rejected.
Last month, Sudan’s parliament approved an alternative 2011 budget
that lawmakers said included an annual income of $2.6 billion for
transit fees — the same amount expected for the loss of South Sudan’s
oil production.
The African Union is seeking to bridge differences regarding the oil
transit fees among many other post-secession arrangements negotiated
between Khartoum and Juba.
2012 BUDGET
Separately the Sudanese cabinet meeting today headed by president Omer
Hassan al-Bashir approved guidelines for the 2012 budget that excluded
oil revenue for the first time in years which in the past constituted
50% of revenue and 90% of exports, Sudan official news agency (SUNA)
said.
The cabinet spokesperson Omer Mohamed Saleh was quoted by SUNA as
saying that the new budget aims at compensating for oil loss through
attracting foreign resources and bolstering local production as well
as reigning spending.
The targeted GDP growth rate is 2.03% he said and an inflation rate of 17%.
Saleh further said the government aims to stabilize the pound and
focus on non-petroleum exports and restructuring the government.
(ST)
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