Sudan halts Southern oil shipment over duties

Khartoum and Juba have failed to reach a deal on oil revenue sharing [Reuters]

Sudan has halted an oil shipment from landlocked South Sudan in a dispute over customs fees.

An estimated 600,000 barrels of crude oil were halted in Port Sudan on Friday, signalling rising tensions between the two countries.

South Sudan, which became independent from Sudan last month, owns 75 per cent of the region’s 500,000 barrels-a-day of oil production. But it relies on Sudan’s cross-border pipeline to sell it.

Sudan has demanded that the South pay a transit fee of $32 per barrel to use its port, pipeline and refineries.

That amounts to about a third of South Sudan’s export value at current market prices.

Customs authorities halted Friday’s shipment due to a row over the payment of duties.

A spokesman for the foreign ministry in Khartoum, Sudan’s capital, said: “Customs asked for the fees to be paid. They paid last time but not this time.”

Khartoum and Juba have failed to reach an agreement on the sharing of oil revenues, which until recently they divided equally.

Last month, Sudan’s parliament approved a 2011 budget that included an annual income of $2.6bn for transit fees – roughly the same amount it expected to lose from Southern oil production.

Asia is the primary market for Sudanese oil, with China buying more than half.