02:35 GMT 30th March 2012
Landlocked South Sudan, which became independent in July after seceding from Sudan, has to use a northern pipeline and the port of Port Sudan to export its crude, and the two countries are in clispute over the transit fees it should pay. Oil is the lifeline of both countries' economies, with China the biggest buyer of crude from the two countries.
Many in South Sudan's capital Juba say they back the oil shutdown and are confident they can cope as many basic services are provided by the United Nations and aid agencies, but they still concede development could stall.
Maria! Awou Yol, South Sudan's deputy minister for finance and economic planning, said his country still had ample foreign exchange reserves but would cut down on government spending, improve non-oil revenue collection and borrow externally. 'Well, we have enough to take us for a reasonable period of time. From seven months to a year,' Yol told Reuters in an interview in Arusha, northern Tanzania.
'Cutting down oil production has left a very big gap in the budget which has to be financed either from outside, or borrowing from inside,' he said.