Al Jazeera reports: 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. “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.
Advertisement 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.
Background
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).
Key facts
- “They shouted at me,” the 55-year-old driver told Al Jazeera as he prepared for another trip.
- Advertisement 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.
- 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.
What this means
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 imports fuel from international markets, while some fuel produced from local oilfields is also sold on the domestic market.“Economic activity is likely to be affected across the board, whether through rising prices of goods in the markets or potential shortages of petroleum products, with repercussions across multiple sectors,” Nasr told Al Jazeera. “Fragile economies like Yemen’s are particularly vulnerable to such external shocks, meaning the impact is likely to be felt more deeply and across all levels of society.” Exhausted savingsShortly after the latest fuel hikes took effect, residents across government-controlled areas, including Aden and Mukalla, reported increases in transportation fares.
Originally reported by Al Jazeera. This story has been edited and re-presented by BRIC Team.
