Fuel prices soar on back of Iran war, leaving Yemeni labourers with no work
Taiz, Yemen – Fuad Mohammed has been working as a construction labourer for more than 25 years. The 46-year-old has seen things get progressively worse
Taiz, Yemen – Fuad Mohammed has been working as a construction labourer for more than 25 years. The 46-year-old has seen things get progressively worse in Yemen’s construction industry since the war in the country started more than a decade ago, and then further deteriorate after the US-Israel war on Iran began in late February, with its devastating economic impact on the wider region. “We can barely eke out a living for our families,” Fuad told Al Jazeera. The ongoing regional war has damaged economies across the Middle East, with government-controlled areas of Yemen bearing a heavy burden as commodity prices soar. Among the hardest-hit sectors is fuel: in January, 20 litres (5.3 gallons) of diesel cost 25,000 Yemeni riyals ($17), but today that price has skyrocketed to 45,000 riyals ($30). That massive spike has triggered a domino effect, driving up the costs of all goods and services dependent on fuel and transportation – including construction. As a result, countless construction projects across those areas – in Yemen’s east and southwest – have ground to a halt. Pausing construction Fuad explained that, before the US-Israel-Iran war, he was able to find work for around two weeks every month. But this year, he has now gone several months with barely any work. “The price hikes in building materials have frustrated both homeowners and construction labourers,” Fuad said. “Those who want to build find that their budgets are no longer enough, and we are left with no work.” Fuad recalled that he briefly found work in May for a woman who had saved money to build a home for her family. However, when a fresh wave of price increases hit the market, she paused construction to wait for prices to drop. “I also work with construction contractors, but most of them have paused their projects at the request of homeowners,” he added.
“When I call them, they tell me they are waiting for regional conditions to improve.” As an example of the rising costs, the price of a truckload of sand increased from 130,000 Yemeni riyals ($87) to 190,000 riyals ($127), while the average cost of one metre of window glass rose from 90,000 riyals ($60) to 130,000 riyals ($87). Fuad’s situation at home is desperate. Relying entirely on daily wages but having no work, he can not provide basic essentials for his family. He has considered finding another job, but he lacks professional experience in other fields. In a desperate attempt to find work, he has lowered his daily wage from 25,000 Yemeni riyals ($17) to 20,000 riyals ($13). “My situation is getting worse every day,” he said. Economic division An official from the Yemen Petroleum Company in Aden told the Reuters news agency in May that the increase in the price of diesel was caused by the worsening supply crisis and rising global fuel prices, driven by regional tensions and the closure of the Strait of Hormuz, alongside increased transportation and marine insurance costs. The official noted that the measure was temporary and would remain in place until the end of the crisis and conditions returned to normal. Wafeeq Saleh, executive director of the Taiz Center for Yemeni-Gulf Studies, explained that the Yemeni economy was particularly susceptible to external economic shocks. “Any disruptions in global commodity markets directly affect the local market because [Yemen] imports nearly 90 percent of its needs,” Saleh told Al Jazeera. “Consequently, the local rise in commodity and fuel prices is a natural outcome of surging global prices, shipping tensions in the Strait of Hormuz, as well as increased maritime insurance and freight fees.” In areas controlled by Yemen’s Houthi rebels, however, including the capital Sanaa, there has not yet been a sharp increase in fuel prices, and therefore no impact on the construction industry – yet.
The BriefWire