South Sudan and Khartoum to revise Crude Oil transit charges on prevailing prices—Official

South Sudan has revised Oil transit charges with its neighbor Sudan on the basis of prevailing crude oil prices, Officials have said.

In August 2013 South Sudan agreed to pay to Khartoum $9.10 for the oil produced in Upper Nile state and $11 for that of Unity state which produces some 20% of South Sudan’s oil. Also Juba agreed to pay the Transitional Financial Assistance (TFA) to the average of the agreed oil transportation fees.

Even at current prices, Sudan previously charged South Sudan about $24.50 a barrel in transit fees in accordance to the 2013 agreement.

However, speaking after a close door meeting of officials from both countries in Juba, South Sudan Petroleum minister Stephen Dhieu Dau told journalists that the two nations have struck a deal not to maintain the charge fixed as the case has been.

“When we negotiate on … fees in particular, that thing would not be fixed … It will fluctuate up and down depending on the prices of the crude globally,” noted Dau after meeting with Sudanese counterpart, Mohammed Zayed Awad.

Dau said the new fee would be agreed upon by a technical team in not less than one month.

“We have agreed in principle but we need the technical people to work on it and in a week to come we will reach the conclusion,” Awad said, declining to give figures.

The negotiations come after an appeal by South Sudanese Foreign minister, Barnaba Marial Benjamin  in an interview with Ashrooq television last month in which he noted that the country’s proceeds from oil had narrowed due to the fall in price and the fixed transit remittance to Khartoum.

“Oil prices have dropped ..They are no longer like in the past ..We have to see how we can share the oil revenue under these conditions.. And if we suppose that the oil price can go down to 20 dollars, at that time there would be nothing to share,’’ said South Sudanese Foreign Minister.

In January 2015, Local media in South Sudan reported that petroleum minister, Dau said his country will consider whether to continue paying Sudan $25 per barrel of oil or seek an alternative.

Credit: The Africa Report, Sudan Tribune

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