Yemen spent $22bn over a decade on fuel subsidies

July 31, 2014 - 11:20:27 am

SANAA: Yemen has spent US $22 billion (around 5 trillion riyals) over the last decade to subsidies oil derivatives, according to a new government report.

Yemen's Ministry of Finance statement released by Yemen News Agency (SABA) said the state spent a huge amount as fuel subsidy programme, and in 2014 it has so far spent approximately $3 billion (656 billion riyals), which is 20 percent of the total state expenditure.

Yemen's economy is reeling under this expenditure since it has triggered a deficit of $5 billion (1.067 trillion riyals) around 13 percent of the country's GDP, the report said.

Removal of petroleum subsidies was a national necessity to avoid economic collapse.

This amount could be spent on improving education, health, security, infrastructure and job creation, the report said.

Fuel prices doubled after the government removed subsidies on Wednesday.

The price of regular petrol increased to 200 Riyals per litre from 125 riyals.

Diesel price was up to 195 riyals from 100 riyals.

The government did not remove its subsidies on natural gas.

Removing fuel subsidies is part of the government's plan announced earlier this year.

It also includes trimming official expenditure.

"In 2013 oil subsidies amounted to four and a half times of the combined domestic expenditure on electricity, infrastructure, universities, schools, sanitation and water projects," the report said, and added the oil prices reforms are completely Yemen's decision, taken without any external pressure. (QNA)



 

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