Keen to put to rest rumours and media reports warning of an imminent lift of oil subsidies, Prime Minister Mohammed Salem Basindwa issued a statement on Monday in which he categorically refuted Yemen central government would announce an end to petroleum subsidies in a bid to shore up liquidities.
The Premier explained that even though Yemen is currently experiencing some grave financial difficulties, especially in the light of recent attacks against its oil and gas industry, he noted that his government would not risk inflation as a quick fix to its liquidity crisis.
He said, “The coalition government does not intend to lift petroleum products subsidies and increase their prices in order to address a difficult financial situation.” He added that despite a current negative outlook he remained confident Yemen would manage as a united country to weather the storm and come out stronger for it.
Even though Yemen has benefited from unprecedented financial help from the international community since 2012 when former President Ali Abdullah Saleh announced his resignation in favour of his then-deputy, Abdo Rabbo Mansour Hadi; the impoverished nation has struggled to jump-start its ailing economy, plagued by a myriad of difficulties.
Moreover, Yemen’s almost sole reliance on its oil and gas industry to generate an income has meant that dissident groups such as al-Qaeda or tribal militias have played Yemen’s weakness to their advantage, targeting the country’s oil infrastructures to advance their agenda.
Two year into the transition of power and the coalition government has yet to put an end to sabotage attacks, a security plague which so far has cost Yemen billions of dollars in lost revenues and unscheduled repairs.