Sudan Agrees to Renegotiate South Sudanese Oil Transit Fees

Sudan agreed to renegotiate fees it charges South Sudan on oil passing through its territory after crude prices declined, according to a government official of the world’s youngest nation.

“It is a positive start that the oil proceeds will be paid on realities on the ground,” presidential spokesman Ateny Wek Ateny said Friday by phone from Juba, the capital. A South Sudanese team will travel to Sudan to discuss the “technicalities” of the payments, he said.

South Sudan broke away from Sudan in July 2011, taking with it sub-Saharan Africa’s third-largest oil reserves. The government in Khartoum exports its landlocked neighbor’s crude through pipelines to a port on the Red Sea and collects $25 per barrel in transit fees.

SUNA, Sudan’s state-run news agency, said late Thursday that President Umar al-Bashir was ordering revisions in economic agreements between the two nations following a visit by South Sudanese Foreign Minister Barnaba Marial Benjamin. South Sudan’s government says it’s pumping about 160,000 barrels per day, a third less than it produced when its civil war began in December 2013.

Prices have been spiraling out of control in South Sudan after the conflict and plunging prices for oil, one of the government’s few sources of income, forced it to abandon its currency peg. Surging food costs and a foreign-exchange shortage boosted consumer prices by 109.9 percent in December.

“If South Sudan allowed Sudan to have receipt of the oil proceeds when Sudan had a difficult time, then now it is only time for Sudan to help us during this time that the oil price has gone down,” Ateny said.