JUBA, Oct. 1 (Xinhua) -- The government of South Sudan is working on a strategy to guide partial or total elimination of fuel subsidies, Minister for Finance Stephen Dhieu Dau said on Sunday.
Scraping fuel subsidies will save money to cater for payment of salaries for civil servants and encourage the private sector to invest in the oil industry, Dau told Xinhua.
Fuel subsidies costs the strife-torn east African nation an estimated 183 million U.S. dollars a year.
"Fuel subsidies are undermining growth of the privates sector and are also a drain on public finances," Dau said. "The subsidies must be reduced or eliminated."
"Removal or reduction of subsidies is the only viable way for us to meet the government budgetary priorities and pay salaries on time," he said.
South Sudan depends on oil export for 98 percent of its revenue, but production has fallen significantly due to the civil war that erupted in December 2013, shutting down most oilfields in the country's oil-rich northern region.
The country now faces acute fuel shortage and hyperinflation. A dearth of foreign reserves has also severely impacted its import-dependent economy.
