South Sudan has encountered waves of periodic fuel crisis since 2011. The government has attempted quick-fix measures, but the crisis has continued unabated. Despite a number of speculations surrounding this matter, however, the actual causes and impacts are not necessarily well understood. In this analysis, we attempt to fill this knowledge gap. Thus, drawing from various data sources, this work examines the causes and impacts of fuel crisis on the country’s economy, and offers a number of potential solutions. Despite being locally produced, coupled with drastically plummeting global crude oil prices, fuel costs more in South Sudan than elsewhere in the region—invoking a paradox. Secondly, the prevailing shortage and high cost are a consequence of a myriad of explanatory factors, namely hard currency shortage, high taxes and duties, absence of refineries and depots, growing demand for oil from electricity producing and consuming sectors, and inefficiency in energy use. These factors are exacerbated by gaps in institutional, regulatory and policy frameworks, lack of fair market restraints, and corruption. Consequently, this has led to fuel hoarding, hikes in transport cost, reduced productivity, amplified social stratification, and the soaring prices of basic commodities. After the floating of the South Sudanese Pound against the US Dollar mid December last year, a new phenomenon occurred. Instead of fuel shortage, there is a drop in demand after the price of a liter was increased from 6 SSP to 22 SSP. In other words, the high costs of fuel have
prompted low demand, as a good number of motorists, households, and businesses that are dependent on diesel powered generators for electricity now face affordability problems. To achieve energy security or sustainable, reliable, and affordable energy supply, South Sudan needs sustainable peace, diversified sources of energy and exports, depots and refineries to meet domestic consumption. Meanwhile, the country ought to: reduce costly import duties and taxes to lower prices,
strengthen its economic relations with Sudan and Kenya to ensure adequate access to fuel, as well as
pursuing public awareness on conservation and efficient use of limited fuel supply to lower demand and protect the environment. The recent re-opening of the South Sudanese-Sudanese borders and the admission of South Sudan to the East African Community are opportunities in the right direction.
