The Downstream Petroleum Sector plays a vital role in ensuring the reliability of supply, affordability, quality, and safety of refined petroleum products. In South Sudan, the absence of a dedicated and fully empowered downstream regulatory entity has contributed to persistent fuel price volatility, inconsistent product quality, weak market oversight, and vulnerability to global energy shocks.
The widespread misconception and unrealistic substitution of Down Stream body, which can stand alone on its own, with the Nile Petroleum Corporation (NILEPET)is misleading. Nilepet is the state-owned energy enterprise, aimed at generating resources to the government of South Sudan in the oil and gas sector. Nilepet is a business body with clear objectives and a mandate governed by its board of directors and executive management. It plays no role in regulating other energy businesses in managing refined petroleum products. It should exert efforts in competing with the existing regional giants in securing enough affordable energy for the country. Its only advantage is that it is owned by the Regulator (GOSS), therefore putting Nilepet in business and regulatory roles together contradicts its primary objective and compromises the needed regulatory capacity in the sector.
An effective downstream regulator should not necessarily impose fixed prices but should ensure that pricing is transparent, competitive, and reflects genuine market conditions. Its responsibilities in collaboration with the business communities include close and frequent monitoring of international energy refined products prices, freight and shipping costs, and continuous evaluation of hard currency exchange rates. Other major roles and responsibilities of the Downstream Authority should be Price Formula Development, market competition, and consumer protection, hence eliminating price monopoly, price collusion practices, and encouraging fair competition within the marketplace.
The Petroleum Authority Directorate in the Ministry of Petroleum, Republic of South Sudan, is primarily focusing on Upstream Petroleum Activities, ensuring efficient resource development while maintaining high standards of governance, safety, and environmental stewardship. The major roles of PA as stipulated in the latest presidential order in 2023 and existing in the Exploration and Production Sharing Agreement (EPSA) are as follows: Exploration/Production Regulation, Resource Management, Technical Oversight, Environmental and Safety Oversight, Revenue Assurance, and National Human Resources Capacity Building. The observation is crystal clear: the absence of an effective and active downstream entity to tackle and regulate refined petroleum products imported nationwide.
South Sudan’s energy security depends on a clear institutional separation between upstream and downstream petroleum governance. The Petroleum Authority should concentrate on exploration, production, field development, resource management, and environmental oversight, while a dedicated downstream regulatory authority should oversee refined petroleum products, market regulation, pricing transparency, licensing, quality assurance, and strategic fuel security. The current energy market situation in South Sudan requires rigorous intervention; inaction will lead to foreign oil giants and usurpers taking full control of this important sector. Making this sector viable is paramount, and it requires our government to lead in preempting the positive measures. Leaving a vital section of business entirely under foreign control possess imminent economic meltdown at any time.
Recent geopolitical crises and tensions in the Middle East have caused disruptions to major shipping routes, rising freight costs, and fluctuations in global crude oil prices have further exposing the weaknesses in South Sudan’s petroleum supply chain. Establishing an effective downstream regulatory authority is therefore a national priority for protecting consumers, promoting fair competition, and strengthening energy security.
As the country is in dire need of urgent palliative solutions to the current skyrocketing of fuel prices, there is a need to put these measures in place:
1. Renegotiating with the Kenyan Government on refined fuel product procurement, allowing South Sudan to own its fuel depots in Mombasa port. This allows South Sudan to directly procure its petroleum-refined products in the Middle East and Western Asia and only use Mombasa port for storage purposes and transit of goods coming to South Sudan. This can enhance symbiotic regional cooperation between the two sisterly countries.
2. Reduce total dependence on a single country by sourcing refined products from multiple regional and international suppliers. Kenya is the only entry route for most consumable goods coming to South Sudan. There is a need to engage other Eastern African countries with international sea routes, like Tanzania. The United Republic of Tanzania has four major constructed ports (Tanga, Bagomoyo, Dar es Salaam, and Mtwara).
3. Formation of the Temporary Energy Prices Stabilization High Level Committee, equivalent to the current High Level Committee on Economic Reforms. The committee can set faster measures to stabilize the price crisis. In collaboration with the economic committee, the foreign currency exchange should be looked into critically to win the confidence of traders and business owners.
4. Formation of a separate Downstream Authority apart from the current Petroleum Authority, with the clear mandate of overseeing the consumable energy and petroleum-refined products market.
5. Encourage private local and international investors to invest in domestic refinery capacity and the establishment of new ones, such as the Nilepet-owned Bentiu Refinery, and build NationalPetroleum Information Systems byestablishing digital systems for tracking imports, inventories, distribution, and pricing.
6. Involvement of South Sudan in the ongoing Eastern Africa Regional conversations on the construction of a mega refinery facility by the African Richest man, Mr. Aliko Dangote. South Sudan must participate in such discussions while proposing and selecting a suitable site for this giant economic facility within the region. We stand a high chance and advantage due to our geographical position when considering the logistical benefit to the project.
In conclusion, an effective Downstream Regulatory Entity would improve price stability, attract investment, enhance consumer confidence, strengthen national preparedness for global energy disruptions, and support sustainable economic development. Together, these complementary institutions would establish a modern petroleum governance framework aligned with international best practices and capable of safeguarding South Sudan’s long-term national interests.
The writer is an environmental expert in the oil and gas sector, Director, Nilepet, and former HSE Manager, Greater Pioneer Petroleum Operating Company. He can be reached via +211912303390/ thuokyoach@gmail.com.
The views expressed in ‘opinion’ articles published by Radio Tamazuj are solely those of the writer. The veracity of any claims made is the responsibility of the author, not Radio Tamazuj.
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