South Sudan lawmakers have suggested that the country’s oil production be stopped as a result of the unsuitable financial assistance being offered to Sudan. The lawmakers on South Sudan’s Parliamentary Committee for Finance, during the debate on the 2016/2017 financial budget, revealed that Sudan is taking the large part of oil revenue and South Sudan must re-think continuing production.

“The Committee has observed with dismay that Sudan is taking 80.33% of the government total oil revenue, while South Sudan is getting only 19.67% of its total oil revenue. This is because the Government of South Sudan continues to provide the inappropriately designed Transitional Financial Assistance (TFA), which gives Sudan $15/bbl. being transported through Sudan. In this regard, it would seem to the committee that it would be better if South Sudan shut down oil production than continuing with the current arrangement with Sudan,” Goc Makuac Mayol, the chairperson for Finance Committee in the Transitional National Legislative Assembly, said.

Mayol noted that the amount South Sudan pays Khartoum is in compliance with the September 2012 Agreement signed between the two countries, which specifies that Juba will pay $3 billion as aid to Sudan for three years. Aside that, South Sudan's government would also pay close to $20 per barrel as oil transit fees. However, the fall in crude price makes it difficult for South Sudan to make substantial revenue from oil.

“South Sudan is currently facing a resource gap of 47% in the proposed FY 2016/2017 and yet she is providing a financial assistance to Sudan. Payment to Sudan must not exceed 30% of Government of the Republic of South Sudan’s crude oil entitlement,” Mayol stressed.

South Sudan had initially halted oil production in 2012 due to accusations that Sudan was stealing crude oil. Meanwhile Sudan at that time, said it was confiscating the quantities of oil equivalent to the tariffs for pipeline use.

Anita Fatunji