Letters of credit, the root cause of fuel shortage

Fuel shortage might continue in the country if the policy of awarding Letters of credit is not revised, the Chairperson of South Sudan Traders’ Association has said.

Ayii Duong says the letters of credit are meant to enable the Central bank offer dollars to traders to import their commodities.

He says offering the letters of credit to foreign companies has not been successful, because fuel shortage is continuing in the country.

He told Eye Radio that national companies should be given the letters of credit to reduce the problem of fuel shortage.

“The central bank availed the hard currency to the ministerial committee in charge and the committee is the one that distributes the money to the foreign companies,” Mr Duong described.

“The process was not successful and that is why we don’t have to lie to the citizens that there are oil products on the way coming soon.”

“There is no fuel now unless we go back to the previous suggestion which indicates that; the Central Bank is responsible for giving out dollars to the National Commercial Banks and thereafter the money will be given to companies that adhere to the required criteria in the market.”

Mr. Duong says consumable goods might run out of stock in the coming days if the current Letters of Credit are not awarded appropriately.

There has been fuel shortage across the country. This has seen market prices, particularly, basic commodities, skyrocket.

Fuel is currently imported by foreign oil dealers, especially Somali businessmen, according to officials.