Yemenis face growing fuel crisis amid protests

04 May 2011

* Main local refinery shut, long queues for fuel

* Southern clashes with militants kill seven

* Yemen government faces fuel, financial crises

By Mohammed Mukhashaf and Mohammed Ghobari

ADEN/SANAA, May 4 (Reuters) - Yemen faces a growing fuel crisis after its crude oil exports and its main oil refinery were shut down more than a week ago, even as it grapples with protests demanding President Ali Abdullah Saleh's ouster.

Trucks and buses at petrol stations in major cities waited in queues at least 1 kilometre (0.6 mile) long to get diesel, which station workers said ran out two days ago. Stations were also rationing rapidly diminishing petrol supplies.

"I've been waiting here since six in the morning, and then when I got to the front of the line, the station worker said he was out of fuel. I waited three hours hoping for 20 litres of petrol with no luck," said Sanaa cab driver Ali Mohsin.

The shortages adds pressure on Saleh, already facing an unprecedented threat to his 32-year rule as daily rallies across the country demand his ouster. Even before protests, he was struggling to quell rebellions in the north and south and stamp out al Qaeda's foothold in Yemen's mountainous provinces.

In the capital Sanaa, many Yemenis have joined protests carrying empty fuel canisters emblazoned with the word "leave".

Though Yemen's oil exports are a modest 105,000 barrels per day, its cash-strapped government depends on the revenue to pay civil servants, its army and fund most state operations.

The fuel crisis started after tribesmen, who the government says are backers of anti-Saleh protests, cut a main oil pipeline in the central province of Maarib that supplies the local Aden refinery and the Ras Isa export terminal on the Red Sea.

"The Yemeni government is losing about 3 million dollars a day," a Yemeni shipping source told Reuters by telephone.

Armed tribesmen have blockaded Maarib, preventing trucks from leaving with fuel shipments as well, and ambushing any vehicles that have tried. Across Yemen, residents are suffering severe shortages in cooking gas, diesel and petrol.

Sanaa residents say electricity has been cut between eight and ten hours daily since last week. Cooking gas could only be bought on the black market where prices have quadrupled.

The shortages have not lessened the crowds on the streets, where tens of thousands have been camped out for weeks to demand Saleh's immediate resignation and trial for the deaths of some 130 protesters in clashes with security forces and gunmen.

Violence has also intensified recently the city of Zinjibar in Abyan province, home to suspected al Qaeda militants. On Wednesday, four soldiers and three civilians were killed and some 20 were wounded after being hit by a rocket propelled grenade, a local official said.

Witnesses in Zinjibar said they saw charred bodies in the streets and ambulances rushing those injured to hospital.

REFINERY SHUT

Employees from Aden Refinery Company told Reuters the refinery had been shut for at least a week, and said their director was in Sanaa to request financing to import crude oil.

A Yemen-based shipping source told Reuters Yemen already bought some 15,000 tonnes of diesel from Saudi Arabia to try and fill the fuel shortage. [ID:nLDE7431U]

An official in the commerce ministry, who asked not to be named, told Reuters the government was in a quandary as the fuel shortage intensified: "We could use a lot of money and buy crude, but if we did that, our finances would be hurt badly."

Yemen, facing rapidly diminishing oil and water resources, has already been grappling with a growing financial crisis.

The International Monetary Fund estimated in April its fiscal gap would widen to 6.4 percent of economic output this year, from 4 percent in 2010, after it boosted spending on social measures in the wake of unrest.

Yemen's economic woes were part of the impetus that drove many to protest -- some 40 percent of its 23 million people live on less than $2 a day and a third face chronic hunger.

Saleh and the country's main opposition coalition were on the verge of signing a Gulf Arab-brokered deal last weekend, but he ultimately refused to sign.

The government has blamed Yemen's political opposition coalition, the second party to the failed Gulf power transition deal, for its inability to convince Maarib tribesmen to relinquish their hold on the province to allow the oil pipeline to be repaired and fuel to be shipped out of the area.

Opposition leaders deny any responsibility and accuse the government of backing the tribes' blockade in order create shortages and turn Yemenis against them.

Source: Reuters