Half Yemen’s Subsidized Oil Smuggled Abroad: USD 2 Billion
Yemeni economists considered raising the prices of oil derivatives a political suicide, emphasizing that there are no realistic justifications for such a critical decision by the government.
Dr. Mohammad Jubran, Professor of Economics at Sana’a University, said that the 2009 general budget included an increase in some materials’ prices among which were petroleum products.
Jubran pointed out that, raising prices of oil derivatives in such circumstances might lead the citizens’ living conditions even worse.
He stressed that, any justifications for increasing oil prices would seem to be pointless as oil prices are within safe limits, for the time being.Moreover, Jubran warned that taking such a step would create many problems and unrest for the country. Confirming that not more than 50%of oil derivatives are consumed locally while the rest 50% is smuggled abroad, Jubran said that Yemeni government is not obliged to support foreigners while Yemenis are deprived of their country’s wealth.
Subsidies exceed USD 4 billion, Yemen Post:
Head of Foreign Affairs Circle at the ruling General People Congress (GPC) Mohammed Al-Qubati revealed the government has no plans to increase the prices of oil derivatives on what it known among locals to be a new Jur’ah (dose).
In an interview aired by Al-Saeeda Satellite Channel, Al-Qubati stated that Yemen spends about $4 billion in supporting oil derivatives, stressing this huge sum does overburden the country’s state budget.
The governmental subsidy on oil is a huge structural problem; the subsidies are supposed to be reduced a little at a time and in conjunction with increased social support so the poor is not unduly burdened. Equally important steps include a reduction in military spending and firm anti-corruption measures. Two billion a year of public funds is diverted into the blackmarket with the subsidies, and thats just one vein of corruption in a vast web.
