Business

Oil Minister Suspended over Inequitable Diesel Distribution

Diesel fuel and oil have been in critically short supply in recent weeks, causing disturbances to the industrial, commercial and agricultural sectors and affecting everyday life for ordinary citizens.

The President Ali Adullah Saleh issued a major decision to suspend the functions of the Minister of Oil and Minerals, Amir al-Aidaroos and the Executive Director of the Yemeni Oil Company, Omar Al-Arhabi, because of a serious shortage which affected several governorates, including the capital Sana’a.

Cars waited in long lines in the capital last week at gas stations, while many facilities ran out of product, causing their managers to protest to the authorities.

The freezing of the oil minister is a novel event, almost the first of its kind in Yemen. Political analysts say that the decision arises from the fear that the current situation may heavily affect oil prices and lead to even greater difficulty in obtaining petroleum products, as it in previous eras of crisis.  Also, the shortage increases the possibility of smuggling and other criminal activity.

Amir al-Aidaroos was a successor to Khalid Bahah as Minister of oil. Aidaroos’s tenure was characterized by unprecedented power to guide policy, and few members of the government were known to intervene in his decisions.

The Third Conference on oil and gas was one of the most important projects carried out by the Minister of oil last year, and Yemen has witnessed a slight rise in the prices of oil profits under the minister’s supervision

In the meantime, the governorate of Aden, along with Lahj, Abyan, and al-Dalea together obtained a subsidy of 6,611,107 liters daily, which was reduced after the global financial crisis and the depreciation of the dollar to 800,000 liters per day, which amounted to a drop of 88%.  But the directorate of al-Mukha in Taiz governorate received 4,611,800 liters daily, even after the crisis.

It is notable that the directorate, whose population does not exceed 30 thousand people, obtains such a massive proportion of oil – a full 530 percent more than the other far more populous provinces combined.

On this basis, many have begun to raise questions about why the al-Mukha coastal directorate is being provided with such a large amount, and whether massive corruption by local or national figures is involved in the discrepancy.

Also the effect of smuggling on the national economy and, accordingly, the steady supply of oil products to the Yemeni people, as well as the funding of government programs, remains a serious concern.