This is a very good article and it includes some solid references on the ever elusive diesel smuggling:
According to a well-informed ex-parliamentarian from the ruling General People’s Congress (GPC), high-ranking regime officials smuggled large quantities of subsidized diesel from Yemen’s southern ports to the Horn of Africa, transferring at least 20 to 30 percent of the public money used to pay for the subsidies into their own pockets. Concrete evidence of the extent of smuggling is impossible to obtain, but the rapid increase in Yemen’s diesel imports makes a circumstantial case.
Though Yemen has its own small oilfields, 70 percent of the diesel consumed per annum must be brought in from elsewhere. While the amounts of other commodities imported remained fairly constant between 1998 and 2003, imports of “petroleum and petroleum products” (the vast majority of which is diesel) leapt from 6.44 percent of all imports in 1998 to 14.86 percent in 2003. The fact that all other categories of imports (including equipment that uses diesel such as power-generating machinery and transport vehicles) actually decreased slightly in this period, combined with the fact that Yemen has no strategic civil or military diesel reserve, make smuggling the only explanation for the increase, or at least a great deal of it. In any event, much of the Yemeni public is convinced that the regime is smuggling diesel. As Islah member Nasser Arman asked some months before the subsidy was lifted, “When the government admits that the subsidies on the oil derivatives go to the pockets of smugglers, why doesn’t it audit even one of them?”
Sucking the Yemeni Economy Dry, using public funds to purchase and smuggle weapons, and to smuggle diesel. I think a good chunk of the budget is allocated to the president without any transparency at all. I found a good fiscal report and W/A this later. (Its 51 pages.) But the WB report notes defense spending ( in millions of Riyals) tripled from 1998-2003, from 52,247 to 148,139
Related: Saudi Arabia will supply Yemen with natural gas to cover its current shortfall, informed sources have reported.(YO 7/27)
Next drug smuggling. Thats another big one. Can we call it narco-terrorism?