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Why the fuel crisis is here to stay

Author : | Published: Monday, April 11, 2016

Bosco Emanuel has now stood here near the Custom Bus Park for about three hours, but he has just gotten only one customer who paid him 5 pounds after a ride on his boda-boda motor cycle.

Going by this rate, Mr Bosco may go home later with less than 30 pounds at dusk, a sharp reduction from a daily earning of about 30 pounds in the good days before the fuel crisis.

This interruption in the daily proceeds he needs to win bread for his family is due to the scarcity of fuel.

“If you go now to the filling station because you need petrol, it is difficult. You stand in the line from morning to evening,” he said, clutching his motor cycle by the trunk.

“Nowadays there is no fuel. When I demand for 40 pounds to transport an old woman from here [Customs] to Juba town, she considers it expensive. She walks on foot,” he said.

Just before journalist Ray Okech could end the interview, a woman, probably in her mid-50s approached him.

“Ya weledi, mafi moasolat le Munuki,” she said, a funny smile hanging on her face, meaning, “my son, there are no public vehicles to Munuki.”

“No problem, I will drop you,” Mr Bosco said in the same Juba Arabic. “Bring 35 pounds.”

The woman just opened her mouth in astonishment and walked away.

“This is affecting us,” Mr Bosco said, looking at Mr Ray and gesturing towards the woman.

While the woman is among many individuals who couldn’t easily go around in town due to lack of means, Mr Bosco is also among several motorists and taxi drivers whose businesses have been interrupted by the fuel crisis.

“If you stay at home, the family will not eat. If you go to the station, those people don’t give petrol even if it is there,” said fellow motorist, Ngota Richard.

“They want to give it out in jerry-cans and for sale on the streets but we who have what to do with it are not given,” he said.

“This thing is sometimes given at night or at dawn to people to whom it is sold in drums.”

In the black market, the price is five times higher than at the pump.

But owners of refilling stations are denying any wrong doing.

“We are not getting it due to shortage of US dollars,” said Abdul Kerim, a manager of a fuel station in Gudele suburb, who requested anonymity.

“The rate of dollar is high and taxes are continuing,” he said, referring to a reduction by 40% in clearance at the entry point in Nimule as previously promised by the government.

The fuel crisis is now worsening to a similar level experienced before the devaluation of the pound in December. Some motorists and taxi drivers had to spend nights at fuel stations, waiting in line to refill.

But when the pumps later open, they would see jerry-cans, and drums sometimes carried in government vehicles, being refilled before the station closed again.

This led to a flourishing black market, similar to that of the US dollars when desperate people would sleep outside forex bureaus, just to be given $200 or $300, which some ended up reselling in the black market.

Some MPs believed the dollar business, from the controversial letters of credit to the parallel market, was threatening to crash the economy in favor of crooks and the well-connected against genuine traders.

While financial institutions are still looking for a fix to the US dollar crisis, including the devaluation of the pound last December, the Nilepet says there is nothing to do about the fuel crisis.

“I think there is no issue of fuel shortage in Juba because if you go on the streets of Juba, you just find it being sold along the streets,” said managing director Machar Achiek.

“So it simply means that there is a leakage somewhere. What is wrong is the supervision. And it is not the managing director who can go and make the supervision,” he told the Eye in a previous interview.

“There are bodies which are charged with making this responsibility and if they are not discharging that, then there is nothing the managing director can do about it,” he added.

According to the research thin-tank, the Sudd Institute, South Sudan has faced several severe episodes of fuel shortages due to a raft of issues, ranging for poor infrastructure, higher taxes, corruption, and reduced hard currency earnings.

They say the shortage was initially because of closure of borders with the Sudan and more recently due to lack of local depots and refineries.

“South Sudan’s petroleum sector suffers misalignment of policies, regulations, and other resources that facilitate its performance in the downstream sector,” it said in a report by three researchers – Nyathon James Hoth, Augustino Ting Mayai and Nhial Tiitmamer, released last month.

The report says institutions such as the Ministry of Petroleum and the National Petroleum and Gas Commission lack coordination.

It also says price controls have caused the fuel dealers to prefer the black market, leading to hoarding to raise the prices in the parallel market.

The researchers also say that because of corruption and administrative loopholes, 52 companies, for example, were given letters of credit in October 2014, but they did not deliver fuel.

Other factors include the reduction in hard currency earnings by the government, regional spillover effects and the demand from electricity and water supply sector.

They recommended short-term solutions such as tax reduction, exemption, preferential treatment, and developing a depot of enough capacity.

Long-term solutions would include building refineries, energy infrastructure and a water supply system.

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