Who is Responsible? WHO STOPPED DIESEL SUPPLYING? WHO STOPPED WATER PUMING?

Sheba Center for Strategic Studies published a study about fuel crisis 2011 and its impact on the Yemeni economic The study counts reasons caused fuel crisis 2011:  The diesel crisis started with the beginning of 2010 when government reduced quantity of diesel offered in market by11.5%.  Bombing pure fuel pipe Mareb-Hodiedah, that considered as the main reason of 2011 diesel crisis.  Reduction in fuel types quantities imported by 19.4% during the first half of 2011comparing with the same period of 2010.

Reasons Caused Fuel Crisis 2011  Percolating down the political and security situations which increased the need of diesel to meet increasing in military missions  Seizing fuel types tankers  Electricity cutting for so many hours per day which increased the demand on diesel  Black market appearance with its so many negative effects

Reasons Caused Fuel Crisis 2011  Panic for having and storing diesel among black market vendors and people in needs  Limitation of general budget to carry on importing costs of diesel to meet local market demand.  Restricting faced privet sector to import diesel to reduce crisis effect level  Nonexistence of emergency plan to face such kind of crisis and the delay in time from the government to take decisions which cause prolongation of the crisis period.

Impacts of Fuel Crisis 2011  Decreasing in economic growth rate from +5,2% down to %  Reduction in national stoke of dollars from 6.0 down to 4.8 Milliards during the period (5 months)  Drawdown the Ryal value by 12% face to others (Dollar, Euro…)  Reduce competitively power of Yemeni exportation (Not of fuel types) due to the increasing in production coast  Pert in what could be exported as quantities of fuel of share part of occidental companies working in Yemen  Reduction in international different aid offered due to non- security situation in Yemen

Impacts of Fuel Crisis 2011  Increasing prices level by  600% for petrol, 800% for diesel 300% for Gaz.  Increasing in transportation coast by 100% in urban areas and by 200% in rural areas.  For alimentary, price of rice increased by 33% flower 26%, cooking oil 25% and sugar 22%, in general the average increasing in alimentary price recorded 26% during the period from January to May Some sources predict that the inflammation rate will reach 20% for 2011 year.

Impacts of Fuel Crisis 2011  Increasing of non-working people 16.3%  Increasing in poverty by 42.8% and loss the food security 32%  Reversing Yemen capability to realize its Millennium Developments Goals (MDG)  judiciary, poverty, famine, education, gender, health, environmental sustainable and cooperation in international development.  In the second national report about (MDG)Yemen will still out of realizing these goals until 2015.

Frist Scenario: No increasing in price of fuels  This scenario built on the supposition of  Finding a political arrangement before 2011 end  Providing fuel types in the local market with sufficient quantities, subsidy prices  No more electricity cut off  Continue with the same international price of fuel types all above 70$ as average

Frist Scenario: No increasing in price of fuels  This scenario could:  Slowly improve the economic activities by 3.5% during the next few years.  Result of moderate increasing in investments.  Realize a reduction in poverty percentage.  Continuous existing of obstacles facing the national general budget due to continuous support of fuel price with a predicted deficit in general budget by 10% in national income from 2012 to  Predicting a reduction in prices level.  Continuous of diesel smuggling towards nearby countries.

Second Scenario: Relieve subsidy out from fuel prices  It could realize better sustainability of economic growth.  Would stop illegal fuel market towards nearby countries.  Realize a reduction national budget deficit.  Cause increase of the inflammation rate  Result increasing of poverty percentage.

We become so familiar with sickness In Hodeida livelihood is become severe  One of three children is malnourished  Many farmers are unable to get diesel needed  Farmers were forced to give up planting crops;  and had to sell their livestock for money

YEMEN NEW STATE After February 2012,  Presidential election brought a new president for Yemen.  New government had been formed  The government carried out a decision to hike up diesel price from 50 to 100 Ry/liter (200%).

“Debate Heated " Between Lawmakers & The Joint Meeting Parties.  The parliament refused to approve government decision  Government proposed: “If diesel price increase approved, farmers will be exempted from taxes”

Argumentations aga I nst Argumentations  For Government:  Continuance diesel price subsidy will encourage black market and smuggling  Big farmers are the most beneficiaries from actual diesel low price  Diesel price after application will be less than that of black market  For Parliament:  Increasing of diesel price will negatively effect small farmers and its application will threaten food security and increase food prices  Controlling black market of diesel is a question of security which could be applied by force and that is a government responsibility.

Government Manifest  Oil Minister Hisham Sharaf: “Yemen depends on imports to provide diesel, a consumed litter of which costs the State ( Ry) is sold for only 50Ry”.  Agriculture Minister Fareed Mujauar: “A plan to excusing agricultural inputs from customs and tax duties”. “And to promote modern irrigation techniques over next three years. These techniques would save 650 million cubic liters of water and 53 million liters of diesel (Note that 23% of all cultivated lands in Yemen are well- irrigated by diesel pumps)”.

Parliament Manifest  The parliament consist a committee to assess the negative impact of the augmentation of diesel price on the agriculture sector.  To control smuggling It would only cost the government $3 million to purchase an advanced and effective monitoring system, one in which all ships would be equipped with GPS so that they could observe whether they are steering in the right direction or not.  For the parliament members those who attack electricity lines are essentially the same who attack the Safer oil pipeline.  If Emirati and Saudi officials Said that they stand in support of Yemen, even though the Yemeni government sells diesel at lower-than- international prices, so why this motivation to take such decision?

All People Are Good Till They Reach Power  Changing happened in role between the two sides  Abdullah Al-Baradouni: “All people are good till they reach power; they are not anymore”.  Members of government and of parliament – play opposite roles  Those who opposed the idea of raising diesel prices some years ago are the same who now propose to raise them; meanwhile, those who wanted to raise the diesel price before now reject this idea.

 A parliamentary committee approved raising the diesel price 100% from YR50/ liter to YR100/liter in 9 July It explained that the committee provided the government with two options: (1) Raising the diesel price to YR70/ liter for one year, and to solve the problem of power in the next year budget or; (2) Reserve 50% of the increased amount (100%) and constitute a joint governmental- parliamentary committee to identify the expenses of this amount. After discussion, it was decided to decrease the reserved amount to 20%. Deal or no deal

Al-Makha  The Committee made reference to Al-Makha, the biggest port for smuggling oil abroad, which has allocated amounts of oil bigger than some governorates. Control Smuggling

Water Needs and Politic Unfair Games  Water as the most important nature element has an influence on people life more than fuel or electricity. During rainfall season, diesel shortage loss its important impact on agriculture activities. So, if there were be any other source of water as a river for example the effect of diesel shortage on agriculture activities would be negligible.  Groundwater is the only source of water that can be used as a stress point between different political forces by eliminating source of power needed for pumping groundwater.  No side is innocent, each party played a negative role in the region where he thought that the other party has numerous supporters.

Water Needs and Politic Unfair Games  Political conflicts produce an environment suitable for growing of negative attitudes such as smuggling, black-market, seizing fuel tankers, bombing fuel pipe lines and attacking electricity circuits.  There is a need to put a national agreement between politicians for never use people needs - especially those are essential for human life - as water into their inter-political conflicts.

It Is Time To Think In Other Source Of Power During Diesel Shortage Farmers Used Other Sources of Power To Pump Groundwater

 The Jatropha Tree require only 250 mm/year to produce uneatable oil that can be converted into bio-diesel fuel.  One ton of Jatropha Curcas seeds from a properly-managed tree can produce up to 600 liters of bio-diesel fuel.  Deputy Minister of Agriculture for Production Development, Abdulamlik Al-Thor said: “there are no plans to support such projects because, we only focused on the development of agriculture that could meet the demands of citizens - not the demand of the western countries” Jatropha Trees as Source of Diesel