Escalating fuel crisis further harms economy and worsens already poor livelihoods and living conditions

Civilians continue to suffer most from seven years of conflict in Yemen. Living conditions continue to worsen dramatically, as living costs increase in a context of significantly limited livelihood options and deteriorating provision of public services. Humanitarian assistances delivery has also become more challenging in recent months due to funding shortages, high fuel needs amidst shortages, and rising costs of food and fuel, with areas controlled by the Sana’a-based authorities (SBA) most affected. Given reduced assistance rations for 8 million beneficiaries (in Al Maharah, Aden, Hadramout, Taizz, Al Hudaydah, Sa’ada, Al Mahwit, Dhamar, and Raymah) since December—from around 80 percent to around 50-60 percent of energy requirements—food security is likely worsening for many households. Widespread Crisis (IPC Phase 3) and Crisis! (IPC Phase 3!) outcomes are likely to continue at the governorate level, with additional worst-affected households likely to deteriorate to Emergency (IPC Phase 4).

Increased tensions between the parties to conflict have contributed to more severe fuel shortages in SBA-controlled areas since late 2021. Long queues at fuel stations and surging parallel market prices have continued in February, especially in Sana’a city. As of February, fuel remained only sporadically available in official stations in SBA-controlled areas, at prices around 9,900 YER/20L, 72 percent higher than last year. Usually, people pay prices more than four times higher (around 40,000 YER/20L, equivalent to 67 USD) for parallel market fuel. While fuel remains generally available at official stations in areas controlled by the internationally-recognized government (IRG), the Yemen Petroleum Company in Aden raised official gasoline prices for the second time in one month, for a total 7.6 percent increase to reach 20,400 YER/20L in late February. This was mainly due to rising global price increases given the Russia-Ukraine conflict; Yemen experienced rapid fuel and food price increases—especially in IRG-controlled areas—in the days following the invasion due to its high dependence on imports and the absence of government price controls and strategic reserves.

In SBA-controlled areas, prices of public transportation have doubled due to fuel shortages. In response, authorities established free transportation buses in Sana’a city. Prices of other commodities including bread have increased by more than 10 percent, according to key informant estimates. On average in February, the cost of the Minimum Food Basket (MFB) across SBA areas was 4 percent higher than January and 29 percent higher than last year according to data from FAO. Meanwhile, in IRG areas, prices of commercial services (transportation, private hospital services) have continued to increase due to rising fuel prices. On average in February, the cost of the MFB across IRG areas was 3 percent higher than January and 82 percent higher than last year. More recently, according to media and key informants, wholesale prices of all basic commodities increased by more than 20 percent in IRG areas, with wheat flour and vegetable oil registering the greatest increases, due to the Russian-Ukraine conflict and depreciation of the currency. With no adjustment in government salaries and insufficient wage increases, many households nationwide will not be able to meet their food needs.

In February, levels of conflict including ground fighting across all of the active fronts (especially in Marib, Hajjah, Taizz, Al Dhale’e, and Al Hudaydah) and cross-border attacks declined relative to high levels in January, according to ACLED data. However, clashes continue to cause new population displacement. In February 2022, around 1,370 households (8,220 individuals) were displaced according to IOM data, a reduction of 44 percent compared to January 2022.  

On February 27, the Aden Central Bank’s Board of Directors issued a warning to consumers against depositing their savings with exchange shops. Additionally, the Ministry of Finance reached an agreement with the Cooperative and Agricultural Credit (CAC) Bank to disburse salaries to public sector employees, replacing the role of exchange shops, in order to limit exchange shops’ influence on the currency market. Given recent control measures and the continuation of public currency auctioning, the Aden-based Rial remained relatively stable in February, at 1,111 YER/USD on average that month, recording a 2 percent increase compared to the previous month, according to data from FAO. The exchange rate in SBA-controlled areas remained stable at levels around YER 600/USD, despite the ongoing fuel crisis.