Summary

Sudan’s decision to raise fuel prices triggered a wave of protests and fierce condemnations across the media and from Sudanese economic experts. Although one economic analyst noted the positive that fuel price hikes will hinder smuggling and provide budget surpluses to fund development, the move has also been condemned for: its impact on citizens and the wider economy, its timing, the lack of public participation in the process. In addition, the government’s rationale and motives have also been questioned. The only solution provided in the briefing came from the same economist who highlighted the positive impacts of the decision.

What happened?

As part of Sudan’s implementation of “aggressive IMF-monitored reforms”, gasoline and diesel prices have been fully liberalised. The finance ministry said that prices would be determined by the costs of import as well as transportation, taxes, and profit margins. The price of gasoline will rise from 150 Sudanese pounds ($0.35) per litre to 290 pounds, while the price of diesel will rise to 285 pounds per litre from 125 pounds (Reuters, 8 June).

Although the finance ministry said that fuel subsidies, which cost $1 billion a year, benefited the middle and upper classes rather than those with lower incomes, Reuters (8 June) note that opponents of the “aggressive IMF-monitored reforms” say that their effects fall disproportionately on the poor. Consequently, Sudanese protesters burned tires in a fierce condemnation of the policy (Voice of America, 10 June).

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Positives?

Nonetheless, the decision to increase the price of fuel was defended by economist Dr. Adel Abdelaziz, who argued that they will hinder smuggling to countries where fuel is more expensive and provide budget surpluses to fund development, health and education (Assayha, 10 June).

Criticism 1 - impact on wider economy

However, economist Dr. Mohammed al-Nayer, said that the decision to raise fuel prices proved fears that the government will return from Paris and conduct “shocking decisions” citing the domino effect of fuel price increases on higher costs for the agricultural and transport sectors (Assayha, 10 June).

Indeed, columnist Sabah Mohammed al-Hassan noted that rising fuel prices will be raised costs that could lead businesses to leave the production cycle (al-Jareeda, 10 June).

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Criticism 2 - impact on citizens

Columnist Sabah Mohammed al-Hassan argues that the government’s decision to raise fuel prices “will have catastrophic repercussions on the citizen,” noting that they will be directly reflected in the cost of transportation, and thereby the prices of basic goods and services, which will “paralyse the entire life of the citizen” (al-Jareeda, 10 June).

Similarly, Amu Adil, an electronic technician, also noted the domino effect on fuel price hikes on other basic commodities, telling Voice of America (10 June) that: “fuel is connected to all sorts of lives. Traders will charge any single cost of transportation they paid during the process of transporting goods. They will be forced to put that cost on the commodities and ordinary [citizens] will pay the cost”.

Indeed, Hajir al-Sir al-Awad, a student, also said that she expects the price of everything to increase, potentially forcing her family to look for other sources of income to allow her to go to college (Voice of America, 10 June).

Criticism 3 – lack of public participation in the decision

Economic analyst Dr. Abdelazim Al-Mahal said that the decision to raise prices reflects a disconnect in the decision-making, procedures, policies and plans between the citizen and the rulers, who “do not feel what the citizen feels” (al-Sudani, 10 June).

Similarly, Sabah Mohammed al-Hassan questions whether the government considered, before initiating its decision, the income of the citizen, “and that many with limited incomes may not be able to go to work” due to rising fuel or public transport costs (al-Jareeda, 10 June).

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Criticism 4 – the government’s economic plans

With the raising of fuel prices stated to be part of economic reforms to facilitate engagement with international financial institutions, columnist Zuheir al-Sarraj questions “what is the policy, and what plans has the government set to implement it?...unless it is to submit to the conditions of the [IMF] without getting anything in return”. Al-Sarraj concludes “it is naive and stupid to agree to conditions and start implementing them before you get a return” (al-Jareeda, 10 June).

Similarly, economist Dr. Mahjoub Abdallah criticised Hamdok’s government for implementing the IMF/World Bank subsidy removal programme without mitigating measures, warning that they will culminate in insecurity via protests and increased crime (Assayha, 10 June).

Furthermore, in calls for peaceful protests against the fuel price increases, Dr. Asawar Adam, a leader of the Economic Alliance for the Forces of the December Revolution, questions the intentions behind the government’s increased fuel prices, Dr. Adam argued that the decision reflects the government “resorting to the pockets of the downtrodden citizens to spend on their bloated government apparatus [while] they gave infrastructure, education and agriculture 3, 16 and 11 billion respectively”, alleging that the 2021 budget shows that the government reaps huge profits from selling fuel (al-Sudani, 10 June).

Criticism 5 – the timing of the policy

Hajir al-Sir al-Awad, a business administration student, said that lifting fuel subsidies as Sudan faces serious economic challenges is a bad decision (Voice of America, 10 June). In addition, economist Dr. Mohammed al-Nayer said that the state should prioritise achieving economic stability before lifting subsidies (Assayha, 10 June), whereas former Energy Minister (resigned in the middle of 2020), Adel Ali Ibrahim, suggests that the government should have worked to stabilise the exchange rate before resorting to the latest fuel price hikes (al-Sudani, 10 June).

Criticism 6 – Finance Ministry’s claims

Zuhair al-Sarraj fiercely rebuked the finance ministry’s claim that Sudan is the sixth cheapest of 42 African countries for fuel prices as rationale for fuel price hikes, labelling it “an outright lie”. Al-Sarraj argued that the comparison of Sudanese fuel prices with those of other African states fails to take into account factors such as the standard of living, per capita income and minimum wages, which culminate in fuel “not constituting a burden” on citizens from countries wealthier than Sudan (al-Jareeda, 10 June).

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Solutions?

To mitigate the impact of fuel price rises, Dr. Adel Abdelaziz called for the government to provide low-cost public transportation by exploiting railways, passenger buses of large loads, and cancelling duties on bikes and motorbikes to encourage their usage (Assayha, 10 June).

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