Wednesday, July 14, 2010

Fuming

Aden is in the middle of a diesel shortage that has lasted almost a week. There are long queues outside each gas station that block traffic and generally get everyone hot under the collar. Shortages are not that uncommon in Aden and Sana'a but they often are not this long. The government says it will end shortly, for what that is worth.

The problem seems to be this: The government recently loosened price controls on diesel and other oil products allowing the price to rise based on a World Bank report in May that oil prices in Yemen were less han 60% the world price average. The World Bank hoped to combine a reduction in government oil subsides with loans and reforms to allow the government to save on subsides and generate income with higher oil prices. The reforms, however, did not work as they were insufficient or absorbed by corrupt officials leaving the poorest in Yemen the burden of the higher fuel costs. As for the shortage, the truckers that keep Aden and other cities supplied have been denied corresponding wage hikes and thus are on strike. Thus, there is not enough diesel reaching Aden.


Further complicating matters is the occasional checkpoint set up by disgruntled members of the army who have not received their salaries for several months. They have also been responsible for waylaying trucks causing acute shortages. Note to self: If I train people in military tactics, pay them well.

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