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As Ramadan Approaches; Diesel and Gas Crisis Swell
  Written By: Moneer Al-Omari (YEMEN POST)
  Article Date:
September 01, 2008



"Lack of diesel in petrol stations  forced me to stop my car and to give up searching after my living. Now, I am spending from my savings. How much more can we take?" questioned taxi driver Khalid Al-Hababi.

Al-Hababi has tried many times to get diesel for his car, but in vain.

The crisis in diesel is blamed for unprecedented crowds and large demand from buses working on the capital's different street. Over the last week, diesel-operated buses were forced to park and stop working until diesel can be bought again.

Many Sana'a University students, especially girls, complained bitterly about the lack of buses working in some major streets of the capital.  

One girl was very angry when she was unable to catch a bus, especially when coming buses were boarded by males. This prompted a policeman to interfere and assign several buses for girls who are incapable of competing with boys at times of rush and very big crowds.

Over the last two weeks, Yemen citizens have been suffering a very sever diesel crisis. It is not the first time in which a crisis like this hits the country; however, several people stress that it is the worst.

In an unexpected move, Yemeni government decided two weeks ago to increase diesel prices from YR35 to YR 200 per liter, five times more than the previous price.

Though it was confined to steel, electricity and cement plants, the decision has pressed owners of diesel-fueled businesses including bakeries and laundries, as well as small factories to rush to diesel stations to buy more quantities of diesel to keep in storage, fearing it  might become unavailable on the market soon.

Such a decision by government aroused the anger of private companies that depend on diesel for running their businesses. It also caused a businessman like Ahmed Bazara'ah, who owns a steel company to announce his intention to stop work and send his plant workers home, especially when diesel prices hit record levels.

In a letter directed to the government, Commerce and Industry Chambers Union warned that the decision is dangerous and poses threats to the industry in Yemen, stressing it will affect the future flow of investment into the country.

Diesel dealer, who just referred to himself as Al-Shara'abi, noted that there is more demand on gas and diesel nowadays, especially towards the advent of Ramadan. "This is how things become every year. As Ramadan approaches, gas and diesel crisis becomes more apparent. The same thing applied to foodstuff whose prices get only higher in Ramadhan," he noted.

Al-Shara'abi continued that officials at Safer Refinery had told them that there are technical faults which prevent the plant from producing its utmost capacity.     

Earlier this year, the government blamed the crisis on the delayed arrival of diesel tankers. It also pointed out diesel smuggling to neighboring countries as a key reason for the constant diesel crisis.

The government revealed that diesel smuggling inflicts big losses on the country, especially when the subsidized diesel does not reach those people who are in urgent need for it.

Al-Sanabani Patrol Station worker Mohammed Handhal stressed that people's demands increase before Ramadan and people resort to storing big quantities of gas and diesel fearing a possible crisis through the month or during Eid holiday.

He continued that bakery owners and farmers, among others, buy diesel in big quantities for storage purposes, emphasizing such a behavior leads to diesel crisis.

High oil prices have also inflated the country's expenditures on petroleum product subsidies, which cost hundreds of millions of dollars per year and represent a heavy burden on the country's budget, especially when some oil derivatives including diesel are imported from abroad and sold to citizens at prices much lower than cost prices.   

Under loan conditions, the International Monetary Fund have pressurized the government to increase subsidies for consumers on both oil products and electricity but these measures were met with popular anger. In 2005, fuel subsidy cuts resulted in widespread riots.

Yemen’s economy is highly dependent on oil production, with the country’s oil exports accounting for around 85 percent of export revenues. It also shapes a big figure in the country's gross domestic product (GDP).