By Deng Machol
Juba – South Sudan has suspended all pre-sales oil contracts to boost competition in its petroleum sector and drive up prices after the country was hit by economic crisis.
The East African country gets almost all of its revenue from oil and has been boosting production as it tussles to rebuild its devastated economy from the wreckage of a five-year civil war, that broke out in late 2013, killed nearly 400,000 people and uprooted four million people from their homes.
The country’s Information Minister Michael Makuei Lueth said president Salva Kiir ordered for suspension of all pre-sales oil contracts to create a conducive environment for competition in international arena market.
“The president directed that all pre-sales contracts should be suspended. These pre-sales contracts are not healthy and they are actually destroying the economy,” Makuei, told reporters in Juba after a cabinet meeting on Friday.
The suspension of all pre-sales oil contract also comes after a week the president Kiir ordered for investigation on the pre-sales oil in the country in wake of sacked oil minister.
Minister Makuei further said the move was to boost the price of South Sudan’s oil in the market, without axiom which malpractice in the oil sector companies have secured pre-sales contracts.
“When you sell to a specific company without competition, definitely you agree on certain rates but when it is free competition you give to the highest bidder,” said Minister.
According to the official figures show, South Sudan’s oil production is virtually 180,000 barrels per day (bpd) and the government is keen and working very hard to reach pre-war levels of 350,000 to 400,000 bpd by mid-2020.
A warring party’s leaders in the world youngest country reached a fragile peace deal in September, 2018, promising to end the political violence, but plans to form a power-sharing in May, this year were delayed after there was no funding to disarm, establish cantonments, rehabilitate and integrate militias and rebels across the country.