The Sudanese government announced on Monday it would implement austerity measures despite more than a week of protests against cuts in fuel subsidies in Khartoum and other cities.
People in the streets are decrying the scaling back of fuel subsidies because it is set to push up already high rates of food and fuel inflation.
Finance Minister Ali Mahmoud insisted the government had no choice but to cut spending to plug a public finance gap previously estimated at $2.4 billion.
“If international oil prices go up, we’ll increase fuel prices. We will not retreat from the decision to lift the subsidies,” he told reporters in Khartoum.
Most widespread protests took place last weekend in neighbourhoods across Khartoum, expanding beyond the core of student activists who had dominated them. Reports coming from eastern town of Gedaref, near the border with Eritrea, suggest hundreds of protesters set fire to a local office of the ruling National Congress Party (NCP), burning part of it before fire trucks put out the blaze.
Sudan has been suffering from years of conflicts, US trade sanctions and economic mismanagement. It lost three-quarters of its oil, the lifeline of the economy, when South Sudan became independent a year ago.
Khartoum is locked in a dispute with Juba over oil transit fees and border dispute which has led to deadly clashes between the two states.
Sudanese President Omar Hassan Al Bashir last week announced wide-ranging austerity plans that include gradually abolishing fuel subsidies, reducing the size of the government, raising taxes on consumer goods, banks and imports to plug its budget deficit, and devaluing the pound in a bid to stabilise the economy and deal with a loss of oil revenue.
The government has signalled that basic food items such as wheat, flour and sugar would be exempt from the new import tax, part of its attempts to rein in growing inflation but many people are not happy with the measures citing concerns about food shortages and strain on their limited income.
The latest austerity measures pushed the price of a litre of petrol from 2.25 Sudanese pounds – around $0.84 – to 3.29 pounds ($1.23), a 68% increase.