Sudan revises budget, includes oil transit fees

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Sudan’s parliament passed a revised 2011 budget that included a new deficit outlook and incorporated expected income from oil transit fees to be paid by South Sudan after it seceded on July 9.

South Sudan took about three-quarters of the two country’s roughly 500,000 barrels per day of oil output with it when it declared independence under a 2005 peace deal that ended decades of north-south civil war.

The two sides have yet to agree how much South Sudan should pay to export its crude — the land-locked country must send oil through pipelines in the north to a port on the Red Sea — but analysts expect Sudan to get less than it did before the split, Reuters reports.

Under the peace deal, north and south shared revenues from oil produced in the south roughly 50-50.

Despite the lack of agreement, the alternative budget for 2011 included an annual income of about $2.6 billion for oil transit and usage fees from South Sudan, about the same amount Sudan is expected lose from oil revenues, lawmakers said.
“This same amount can be obtained from oil transit fees and export,” Babiker Mohamed Toum, head of parliament’s economic committee, said.

The budget estimated total government revenues for the year would reach 23.3 billion Sudanese pounds and spending would hit 26.7 billion pounds.

The official rate of the Sudanese pound is about 2.7 pounds to the U.S. dollar, but the rate can go as high as 3.5 pounds to the dollar on the black market.

Parliament also approved a law that increases tax on telephone calls to 30 percent, up from 20 percent, which the finance ministry said it expected to raise another 165 million pounds.

South Africa’s MTN and Kuwait’s Zain both run mobile operators in Sudan.

Sudan faces a raft of economic challenges after the split, including high inflation and debt of about $38 billion.

Sudan’s President Omar Hassan al-Bashir said on July 12 the north would launch austerity measures as part of a three-year economic programme to try to compensate for the loss of oil revenues.

South Sudan, which draws about 98 percent of government revenues from oil, exported its first cargo as an independent country this week.

Lual Deng, the country’s oil minister before secession, said the north had previously agreed to let the July cargoes pass through their pipelines until a final deal is reached on what fee the south should pay.

An estimated 2 million people died in the north-south civil war, fought for all but a few years since 1955 over ethnicity, religion, ideology and oil.