In his report submitted recently to parliament, Prime Minister Ali Mujawar assured that subsidies of oil and its derivatives take up two thirds of state budget while poor citizens' benefit from its derivatives do not exceed 22 percent.

Though national economy achieved a 5.6 growth in 2005, Mujawar's report mentioned that there was economic decline in 2006 and 2007 wherein the annual growth was just 3.2 percent.

Mujawar attributed this decline to the decrease of revenues of gas and oil estimated at 8.3 percent and 12.2 percent respectively, noting that Yemen's produced quantity of crude oil dropped off during 2007 to reach 117 million barrels instead of 146 million in 2005.

Likewise, the growth of national investments saw a decline estimated at 3.6 percent in 2006 though it was 14.4 percent in 2005, namely because of decrease in the general investments. Similarly, foreign investments in Yemen decreased from 49.4 percent to 45 percent, dealing another blow to the country, as it tries to convince foreign investors to invest in Yemen.

Meanwhile, Mujawar pointed out that state's reliance on oil and gas will have negative effects at the midterm, while the current and investment expenditures will increase.

He as well convinced parliament members to endorse numerous production sharing agreements without being studied adequately, hinting there is a necessity now to attract foreign capital to invest in gas and oil sectors including an agreement with Yemen General Corporation for Oil in bloc No. 39 at Al-Mahara province's Damghot area.

Minister of Transport and Marine Affairs Khalid Ibrahim Al-Wazeer blamed the increase of oil prices, mainly plane fuels, for the losses of Yemeni Airways (Yemenia) over the years 2005 and 2006.

Al-Wazeer added that operational expenditures of Yemenia, which has 10 aircrafts of different sizes, mounted to YR 34 billion and the operational loss was YR 2.5 billion for the same year, while state subsidies for some internal destination like Al-Ghaidah and Socotra reached about YR 400 million and the loss calculated before taxation was YR 92 million.

In 2005, the operational expenditures rose to YR 43 billion and the operational loss YR 3.5. State subsidies for Al-Ghaidhah and Socotra reached YR 300 million and the losses of the same year before taxes are YR 2 billion.

Operational expenditures of 2006 mounted to YR 47 billion and the losses were YR 5 billion.

According to Al-Wazeer, the company made a small profit in 2004 and small losses in 2005 and 2006. He also mentioned that the increase of aircraft fuels and surplus employers are key reasons for loss, hinting that each aircraft has 350 employees.

He also added that there is a small profit in 2007 and these profits will appear as soon as the chartered accountant ends his revision.