Sudan plans to remove fuel and wheat subsidies to bridge budget gap-paper

KHARTOUM (Reuters) - Sudan plans to lift more fuel and wheat subsidies to bridge a budget gap, a senior ruling party official said in remarks published on Sunday, a move that in the past ignited anti-government protests. Sudan has been struggling with an economic crisis since losing much of its oil reserves - the main source for revenues and dollars needed for imports - when South Sudan became independent in 2011. The government started lifting some fuel subsidies as part of austerity measures worth 7 billion pounds in July 2012, leading to several weeks of protests. The ruling National Congress Party (NCP) agreed with the other government coalition partners on Saturday night to lift more subsidies for fuel and also wheat, said Hassan Ahmed Taha, the NCP's economic secretary, according to al-Sahafa newspaper. "The Sudanese economy is facing many challenges," he said. Last year's brief border skirmishes over disputed territory with South Sudan had been expensive, he said. He gave no volume for cuts or time frame and could not be reached for comment. Sudan has given no recent estimate for the cost of fuel subsidies. The loss of oil has hit the Sudanese pound, whose value has more than halved on the black market since southern secession as the country needs to import most food needs. Last week, Sudan agreed with South Sudan to continue routing the neighbour's oil exports through the north, which will bring in much-needed dollars. Khartoum had threatened to halt the flows in a row over an alleged rebel support for Sudanese rebels. Inspired by an Arab spring, the opposition has tried to capitalize on public anger over the economic crisis but failed to mobilise the masses of protesters seen in Egypt, Tunisia or Yemen.