KHARTOUM, Jan 24 (Reuters) - Sudan's government increased prices for electricity, one of the country's few still-subsidized commodities as part of an ongoing economic reforms package, the country's acting energy minister told Reuters.
The price changes, effective immediately, entail a sharp spike in prices for agricultural consumption from up to 1.6 pounds per kilowatt to 9 pounds per kilowatt and large increases for domestic consumption as well.
"It is difficult for the government to provide the subsidy in the old way under current circumstances," said acting energy minister Mohamed Abdallah, adding that the government was considering investment projects in solar and wind power but faced difficulty due to the subsidy.
Sudan's electrical grid suffers from decades of neglect and difficulty paying for fuel and spare parts, leading to extensive power cuts during the hottest months of the year.
In 2020, Sudan had removed subsidies on fuel and greatly reduced subsidies on wheat as part of IMF-monitored reforms. Reforming the electricity subsidy is also a part of the reforms, which Sudan continues to pursue despite a military takeover in October that put a pause on the country's debt relief efforts.
The new price changes would mean that the government reduced its subsidy on average to 69% from 95%, as part of a three-year programme to remove the subsidy, Abdallah said. He said electricity production would cost $2.4 billion total this year.
The government maintained higher subsidy rates for lower consumption tiers in order to not burden lower-income households, he said, whereby those at the highest tier of more than 1000kw pay 77% of the real cost.
Prices had first been raised earlier this month, but the country's Sovereign Council had suspended the move following protests in the country's Northern State.
Protesters there have blocked a main trade route connecting Sudan to Egypt for weeks, in protest of the price increase. They have been supported by protesters against military rule elsewhere in the country. (Reporting by Khalid Abdelaziz, writing by Nafisa Eltahir; Editing by Sandra Maler)
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