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.

In 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.