One morning in Port Sudan, fuel tanks were full, tankers waited their turn to unload, and trucks moved routinely between storage depots and filling stations. On paper, there was no supply crisis. Available stocks were sufficient to meet market demand.
Yet another battle was unfolding out of public sight, deep within the foreign-exchange market. Dozens of companies were competing for US dollars to finance new fuel shipments amid rising import costs and shifting regional trade routes.
Within days, the effects of that struggle spread from corporate offices to the wider economy. As the dollar surged on the parallel market, fuel prices followed suit. In some states, the price of a litre rose from around SDG 5,800 to SDG 6,691.
What had begun as a technical issue within the Ministry of Energy quickly evolved into one of the most significant economic and political controversies since the government’s return to the capital following the outbreak of war in mid-April 2023.
At first glance, Sudan’s fuel crisis does not appear to be a straightforward supply shortage. In early March, the Ministry of Energy stated that petroleum-product supplies were stable and that available stocks would meet national demand through the end of April 2026. Later that month, the ministry reported that more than ten vessels carrying petroleum products were anchored off Port Sudan awaiting discharge, while more than twenty additional ships were stationed in the Red Sea awaiting their turn.
In the same statement, the ministry noted that it had withdrawn from fuel-price setting in 2021 following the adoption of a price-liberalization policy and that its role had since become primarily technical and regulatory.
The decisive battle, however, was taking place in the foreign-exchange market. Between 9 and 11 June, the dollar on the parallel market rose from around SDG 4,200–4,300 to SDG 4,400, then climbed to SDG 4,700 before briefly touching SDG 4,800.
On June 11, the Transitional Sovereignty Council in Port Sudan stepped into the dispute through a meeting chaired by Lieutenant General Ibrahim Jaber with energy-sector officials. The following day, the Council of Ministers, under Prime Minister Dr. Kamil Idris, decided that the government would resume direct imports of petroleum products in an effort to stabilize the market and contain exchange-rate volatility.
Fuel ceased to be merely a question of supply and distribution and became, above all, a monetary and macroeconomic issue.
The Ministries of Finance and Economic Planning and that of Energy and Petroleum, together with the Central Bank of Sudan and the Economic Security Directorate, were tasked with implementing the decision.
In this sense, fuel ceased to be merely a question of supply and distribution and became, above all, a monetary and macroeconomic issue.
Official supply indicators alone cannot explain what happened. The real bottleneck lay in the financing of imports. Demand for dollars on the parallel market intensified as three developments converged: continued official assurances that fuel shipments were plentiful, the dollar’s rise to record levels on the parallel market, and the government’s explicit linkage of fuel imports to exchange-rate stabilization.
A series of Structural Problems
Import licences were granted to firms lacking the storage facilities and infrastructure needed to operate in the fuel sector.
Anonymous supply manager at a private-sector fuel company
The crisis that erupted in June was not the first of its kind in 2026. On March 4, the Ministry of Energy urged citizens not to be swayed by rumours and reiterated that fuel reserves were sufficient until the end of April. Three days later, it went further, announcing an import programme implemented in partnership with private-sector companies. Thirty firms had completed the necessary coordination procedures and organized themselves into five import groups.
At the time, the ministry emphasized that state-owned companies would continue supplying roughly half of market demand while retaining the authority to intervene whenever potential supply gaps emerged.
Yet by the end of the same month, the ministry acknowledged that regional geopolitical disruptions had begun to affect domestic prices. In a statement issued on March 31, it noted that global fuel prices had risen sharply and that these increases had negatively affected Sudan’s market under the liberalized pricing regime. It also urged importers to reduce their profit margins in order to ease the burden on consumers.
This suggests that rising prices were not simply the result of domestic shortages. They were also driven by an external price shock transmitted into a liberalized, import-dependent market.
The market’s regulatory framework itself remained fragile. On 23 February, the Ministry of Energy warned against the rapid expansion of fuel stations and storage facilities without full compliance with technical and regulatory requirements. The warning implied that the rapid growth in the number of market participants had not always been matched by equivalent investments in storage capacity, operational capability, or regulatory compliance.
The issue resurfaced on June 11 when the ministry convened an expanded meeting with representatives of forty-five public and private companies to discuss updated import regulations for 2026. Taken together, these developments suggest that governance and market regulation lay at the heart of the crisis long before it erupted into a full-scale economic emergency.
Part of the tension surrounding the government’s recent decisions emerged between March and June 2026 in the form of growing disputes between fuel-importing companies and government authorities overseeing the sector. The disagreements centred on import licensing procedures and market regulation.
According to a supply manager at a private-sector company who spoke to Atar on condition of anonymity, one of the principal sources of tension was the granting of import permits to small firms that lacked storage facilities, operating stations, and the infrastructure necessary to function in a strategic sector requiring substantial technical, financial, and logistical capacity.
The source said that several established companies objected to the policy, while some industry representatives referred to these firms as “broker companies” (sharikat aj-jowkia)—a colloquial term used to describe businesses with limited operational capacity that enter the import trade primarily as intermediaries. Their participation raised concerns about market regulation, competition, and the allocation of import quotas.
The disputes extended to the organization of import groups and procurement mechanisms. Companies informed the Ministry of Energy that they had been unable to reach a consensus on how imports and quotas should be distributed among market participants, and called on the ministry to intervene by establishing a clearer framework for governing the sector.
The source added that the government’s announcement that it intended to expand its direct role in fuel imports, following market disruptions and mounting pressure on the exchange rate, sparked a broader debate within the industry. One camp argued for a stronger state role in managing a strategic commodity closely linked to economic security. The other maintained that the solution lay in reorganizing the market, raising qualification standards, and strengthening governance and oversight of importing companies.
The State Returns as Fuel Importer
The Ministry of Energy failed to adequately prepare for supply disruptions and exchange-rate volatility. Instead, it relied heavily on the private sector without imposing sufficient regulatory oversight, technical standards, or compliance requirements, a situation that ultimately exacerbated the crisis.
At the heart of the problem is the fact that some fuel-importing companies operate with limited technical and financial capabilities. Many lack adequate storage facilities and depend on state-owned infrastructure, while others function primarily as intermediaries in import transactions rather than investing directly in the sector’s infrastructure.
Under this model, a significant portion of these companies’ activities depends on acquiring foreign currency from the market to pay for imports. As multiple firms simultaneously seek dollars to finance large fuel shipments, demand for hard currency spikes within short periods. The result is recurring shocks in the foreign-exchange market.
Consequently, the fuel sector has become one of the major drivers of exchange-rate movements, even as much of the country’s storage and distribution infrastructure remains dependent on state facilities.
Following a severe fuel shortage and a sharp depreciation of the Sudanese pound, Sovereignty Council member Lieutenant General Ibrahim Jaber chaired a meeting on “ensuring the availability of petroleum products and curbing exchange-rate volatility.”
On June 12 this year, the Council of Ministers formally decided that the government would resume direct imports of petroleum products.
The move marked a significant policy reversal. Only months earlier, the authorities had taken additional steps to expand the role of the private sector.
In October 2025, the Central Bank of Sudan ended the monopoly over petroleum-product imports and opened the sector to all commercial banks. After the latest crisis, however, the government reversed course, assigning the Ministries of Finance and Energy, the Central Bank, and the Economic Security Directorate responsibility for implementing the new import regime.
The significance of the decision lies in the fact that it explicitly links fuel-market management with exchange-rate stabilization for the first time. Its primary objective is to reduce private-sector demand for dollars on the parallel market and thereby ease pressure on the national currency.
The government’s approach centres on activating a “pricing committee” comprising representatives from the Ministry of Energy and Mining, the Central Bank of Sudan, the Ministry of Finance, Economic Security, and other relevant bodies. The committee would be responsible for setting and periodically reviewing retail prices for petroleum products, overseeing price harmonization across distribution stations, and monitoring market stability. In effect, fuel pricing would be brought under an institutional framework involving multiple government and technical agencies.
Speaking to Atar, petroleum researcher Ahmed Al-Tayyib described the government’s claim that it was “entering” the fuel-import business as misleading. According to Al-Tayyib, the state had never truly withdrawn from fuel imports. Government-owned companies already accounted for roughly 50 per cent of fuel imports, including two firms affiliated with the Ministry of Petroleum: Nile Petroleum and Sudapet. The remaining 50 per cent was imported by approximately thirty private companies.
He noted that private-sector firms did not operate independently. Rather, they had been organized into five import groups under the arrangements then in force, meaning that imports were conducted through consortiums of companies rather than through direct competition among individual importers.
According to Al-Tayyib, the market structure combined public and private actors within a regulatory framework overseen by the relevant authorities. As a result, debates over fuel imports extended beyond questions of supply and financing to include quota allocation, import mechanisms, and market governance.
He also pointed out that fuel prices were shaped by far more than international import costs. Transportation, insurance, and a variety of fees contributed significantly to the final retail price. Contemporary estimates suggested that government levies alone accounted for roughly 31 per cent of the price of a litre of fuel, excluding additional charges imposed at the state level.
These factors, he argued, illustrate the nature of the debate surrounding the fuel sector during this period, a debate focused on market structure, the respective roles of state-owned and private companies, the regulation of imports, and the various components that make up the final cost of fuel.
An Import Bill on the Rise
Sudan’s fuel crisis was not a supply shortage, but a foreign-exchange crisis.
Sudan’s latest fuel crisis reveals that the problem was not simply one of physical shortages. Rather, it was fundamentally a crisis in foreign-exchange management, with fuel imports serving as its primary transmission channel.
In the first quarter of 2026, Sudan’s petroleum import bill rose to US$501.25 million, up from $346.4 million during the same period a year earlier—an increase of 44.7 per cent. Petroleum products accounted for 25.9 per cent of the country’s total imports, which reached approximately $1.94 billion during the quarter. Fuel thus became Sudan’s single largest import category and the greatest source of pressure on the foreign-exchange market.
The increase coincided with a sharp depreciation of the Sudanese pound on the parallel market, where the dollar traded between SDG 4,700 and SDG 4,800. Taking the commonly cited market benchmark of SDG 4,020 as a starting point, this represented an increase of approximately 19.4 per cent in less than two weeks.
First-quarter data for 2026 also reveal a significant shift in Sudan’s fuel-supply map. Oman emerged as the country’s leading supplier, with exports to Sudan valued at $174.3 million. India followed with $115 million, while Saudi Arabia supplied $94.3 million worth of petroleum products.
By contrast, fuel imports from the United Arab Emirates fell dramatically to approximately $14 million, down from $163.5 million during the first quarter of the previous year.
The figures point to a shift in the centre of gravity of Sudan’s fuel trade—from the UAE toward new supply routes centred on refining and trading hubs across the Arabian Sea, the Indian Ocean, and the Red Sea. These routes were largely selected by private-sector importers.
India occupies a particularly important position within this equation. As one of the world’s largest refining centres, it imports vast quantities of crude oil from Gulf producers before re-exporting it as refined petroleum products. Consequently, some market observers view a portion of Sudan’s imports from India as a continuation of previous regional trade flows, albeit through a different route.
Oman, meanwhile, has emerged as one of Sudan’s most important new supply points. Its geographic position has helped reduce the impact of potential disruptions associated with the Strait of Hormuz, giving it a logistical advantage over other Gulf suppliers.
Data from the Central Bank of Sudan further show that the rising fuel bill translated directly into stronger demand for dollars. Diesel imports increased from $200.8 million in the first quarter of 2025 to $261.4 million in the same period of 2026, while gasoline imports surged from $80.8 million to $153.6 million.
In this sense, fuel has ceased to be merely an imported commodity. It has become the fastest channel through which instability in the foreign-exchange market is transmitted to transportation costs, production expenses, and consumer prices. The return of displaced persons and refugees could further increase demand for petroleum products in the months ahead.
| Category | Q1 2025 ($ million) | Q2 2025 ($ million) | Change |
|---|---|---|---|
| Diesel | 200.87 | 261.37 | 30.1% |
| Gasoline | 80.85 | 153.62 | 90.0% |
| Total petroleum products | 362.50 | 501.25 | 38.3% |
Table 1: Sudan's petroleum-product imports.
Figure 1: Sudan's Petroleum Imports, 2012–2025
Source: Central Bank of Sudan.
Note: The figure does not include data for 2023, as the Central Bank did not publish a report for that year.
Gold in Exchange for Imports
Sudan’s central bank now requires fuel importers to deposit 200 kilograms of gold before receiving import approval.
The Central Bank of Sudan has introduced a new requirement linking the issuance of no-objection certificates for petroleum imports to the deposit of 200 kilogrammes of 21-carat gold with the central bank.
The measure seeks to restructure the relationship between the fuel, gold, and foreign-exchange markets at a time when fuel has become both Sudan’s largest import category and the principal driver of demand for foreign currency.
The central bank is effectively betting on gold as a tool for regulating fuel-import financing, screening for financially stronger companies, and encouraging greater gold flows through official channels. The entry of fuel-importing firms into the gold market could also increase domestic demand for the metal and further integrate gold trading into the formal banking system.
Yet the precise nature of the 200-kilogramme requirement remains unclear. Authorities have not specified whether the gold constitutes a refundable guarantee, a frozen deposit, collateral, or simply proof of financial capacity. The scale of the requirement itself is likely to favour larger firms, potentially reducing the number of importers and increasing market concentration in the hands of a relatively small group of companies.
The measure raises several potential challenges. Most notably, it significantly increases the cost of entry into the fuel-import market and effectively limits participation to firms with substantial financial resources. This could lead to greater concentration within the sector and reduce competition.
At the same time, the requirement creates an additional source of demand for gold within the domestic market. If the gold is held as collateral for a specified period, it would also tie up a portion of corporate capital.
Crucially, however, the need for foreign currency to pay overseas suppliers remains unchanged. The policy may shift part of the financing burden from the foreign-exchange market to the gold market, but it does not eliminate the underlying demand for hard currency.
Uncertainty surrounding the exact status of the required gold and the conditions under which it can be recovered will remain an important factor in assessing both the true cost of the measure and its long-term implications for the structure of Sudan’s fuel market.
