Yemen fuel price hikes deepen hardship as transport costs rise
Mukalla, Yemen – When Abdullah Salem raised his fare by 100 Yemeni riyals ($0.06) on a routine afternoon trip from the eastern outskirts of Yemen’s port city of Mukalla to the city centre, passengers pushed back immediately. “They shouted at me,” the 55-year-old driver told Al Jazeera as he prepared for another trip. “I told them it’s not my decision; it’s the government who have hiked fuel prices.”The Yemen Petroleum Company (YPC), controlled by the internationally recognised government, has announced a new round of fuel price hikes in areas under its administration, a move that analysts say could accelerate inflation and deepen economic hardship across the country.Recommended Stories list of 3 itemslist 1 of 3Does Trump hold ‘all the cards’ against Iran in the Strait of Hormuz?list 2 of 3It does not make sense to invest more Arab resources in a US alliancelist 3 of 3In Yemen, Starlink internet brings opportunities – for someend of listIn a statement posted on social media on April 16, filled with praise for the government’s efforts to stabilise prices and ensure the flow of fuel, the company said it had raised the price of petrol and diesel to 1,475 Yemeni riyals ($0.98) per litre, up from 1,190 ($0.79), representing a sharp 24 percent increase.It attributed the increase to regional tensions, including the Iran war, disruptions to shipping through the Strait of Hormuz, and a surge in transport and insurance costs for shipments to Yemen.In the same post, the YPC sought to ease public concern, saying the increase would be temporary and that prices would return to previous levels once regional hostilities subsided. “The company regrets having to raise prices and emphasises that the increase is temporary, contingent on the resolution of the Gulf crisis and a return to normal conditions,” it said.The company has since defended the fuel hikes, even as global oil prices have occasionally decreased amid hope of a possible deal between the United States and Iran. The prices would still have to rise, the company said, because it imports already-refined fuel with prices that are tied to global product markets rather than the cost of crude oil. It added that fuel is priced in local currency upon arrival in Yemen, based on the US dollar exchange rate at the time of purchase, in addition to transport and storage costs.Struggle to earn enoughBut for millions of Yemenis like Abdullah Salem, who work long hours and still struggle to make ends meet, the latest fuel hikes are another blow.Abdullah said that he spends his mornings transporting students from different parts of Mukalla to the city’s university, before driving routes for the general public in the afternoon. Even with the long hours, he barely earns enough to cover fuel costs and support his extended family, including his brother’s household, with whom he shares a home.“We don’t save anything. Everything is expensive, food and other commodities,” he said.To cope with the rising costs, Abdullah has increased monthly fares for students by 3,000 riyals ($2) and raised afternoon trip fares by 100 riyals ($0.06). While students have largely accepted the increase, many passengers on his afternoon routes have stopped using his service, opting instead to hitchhike.Shoppers move through a busy market in Mukalla on a hot afternoon, as residents brace for rising prices of essential goods after fuel hikes of more than 20 percent approved by the Yemeni government [Saeed Al Batati/Al Jazeera]“We want the government to provide subsidised fuel,” Abdullah said. “People are very poor, and these price hikes will only push food prices higher.”Despite no immediate reports of increases in food prices, economists say the latest fuel hikes are likely to push up costs across several sectors, including food. They also warn that the government could approve another round of fuel price increases if global oil prices continue to rise.Mustafa Nasr, head of the Studies and Economic Media Center, said Yemen impor
Discussion (0)