December 14, 2017 / 3:21 PM / 2 years ago

Sudan's oil supply threatened due to dollar shortage

KHARTOUM, Dec 14 (Reuters) - Sudan’s main oil refinery is unable to secure funding over much-needed maintenance that has been repeatedly delayed, a ministry official said this week, as the country continues to suffer from a shortage of foreign currency.

Saadeldin Bushra, state minister for fuel, urged lawmakers to press the government to pay for 17 fuel shipments that could be used as reserves to ensure the required 45 days of scheduled maintenance can take place in March.

“Time is short and the need is urgent,” Bushra said at parliament on Monday, warning of further damage to Sudan’s already struggling economy. It was not clear how Sudan would be able to purchase the fuel shipments.

Sudan’s economy has been struggling since the south seceded in 2011, taking with it three-quarters of the country’s oil output. The Sudanese pound has also weakened and prices have climbed with foreign reserves low.

The Sudan-China-owned refinery last underwent maintenance in March 2016. Its March 2017 scheduled maintenance was delayed to October then again to March 2018 due to the foreign currency shortage.

Sudan’s parliament has yet to discuss next year’s budget. The country’s fiscal year ends on Dec. 25, but it has been unable to pay off arrears owed to oil companies because of its hard currency crisis.

The Sudanese pound has continued to weaken against the dollar since Washington lifted 20-year-old sanctions in October, putting pressure on scarce hard currency.

In a report earlier this week, the International Monetary Fund urged Sudan to float its currency to boost growth and investment.

The central bank has held the official rate at 6.7 pounds to the dollar, but currency is largely unavailable at banks, so traders have had to rely on the black market in which the pound is currently trading at more than triple its pegged value.

The central bank announced emergency measures last month, including tight restrictions on imports, to boost its currency. (Reporting by Ali Mirghani; Writing by Arwa Gaballa and John Davison, Editing by William Maclean)

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