1st October 2020
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Gov’t urged to suspend the unprofitable oil production

Author: Garang Abraham | Published: Tuesday, September 15, 2020

An oilfield in South Sudan | Credit | Hiba Morgan/Aljazeera

A civil society activist has appealed to President Kiir to suspend oil production, arguing that it is not benefiting the country right now.

Jame Kolok, who heads Foundation for Democracy and Accountable Governance, said the fall in oil prices and misuse of oil proceeds make the sale of crude inappropriate.

“In fact, I was the head of state, I would disband even any sale of crude oil because it doesn’t make sense,” Kolok told Eye Radio on Monday.

Kolok suggested that the resource should be preserved for generations or sold when global oil prices go up again.

Last week, the global benchmark Brent crude dropped to $42.04 per barrel for a fourth straight day.

According to the Organization of the Petroleum Exporting Countries, OPEC, this is partly because Saudi Arabia made the largest monthly price cuts in sale of its crude to Asia, its largest regional energy market.

In the US, the crude was down to $38.55 per barrel, the lowest since 10 July.

“We need to reserve this oil. We need to implement the peace agreement and create the necessary environment for the other sectors of the economy to strive,” Kolok continued.

Economists attributed the drop to the coronavirus pandemic which has undermined energy demand worldwide, but especially in China.

With Covid-19 disruptions, drops in global prices couple with mishandling of the country’s funds, Kolok called for suspension of crude oil sale.

He urged the government to generate money from other sectors such as mining and tourism.

“I think South Sudan has a number of things that will attract money, including improving our tourism and mining sectors,” he added.

Even before the aforementioned factors emerged, the government was struggling to meet its obligations, including paying civil servants’ salaries and providing basic services such as security, clean drinking water, road networks and electricity.

Related articles: Why gov’t struggles to pay civil servants

Reports show that the ruling class mismanages the oil proceeds, with leaders using it to enrich themselves – most of whom have invested outside the country, mostly in the neighboring Kenya and Uganda.

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