2011 Diesel policy and impact on water

The steep and steady expansion of well-irrigated area in Yemen, was largely the outcome of the diesel policy pursued by the state since the 1970s. Following many other developing countries, Yemen heavily subsidised fuel and maintained a flat price irrespective of price fluctuations in the international fuel market. The fuel subsidy bill became a heavy burden on the government spending due to continuously increased domestic fuel consumption and the rise of international fuel prices.

Study in 2011

Groundwater is the main source of agricultural and municipal water and contributes 70% of total water use in Yemen. All aquifers are depleting at a very high rate owing to the combined effects of a host of socioeconomic, institutional and climate-change factors. The government policy on diesel subsidy was largely believed to be one of the significant factors which stimulated large-scale pumping of water for irrigating water-intensive cash crops such as qat, fruits, and vegetables. A rapid field assessment was conducted between June and December 2011 in six different regions of the country to analyse the impacts of the severe diesel crisis that accompanied the political turmoil of 2011 on groundwater use and agriculture.

Fuel consumption

Agriculture consumes about 12 percent of all fuel, mostly for irrigation. Interestingly, fuel is the single largest expenditure item for agricultural production despite the petroleum subsidy. The transport sector as the biggest consumer of fuel constitutes also an important input for the production of other sectors; industry and services are the most transportation-intensive sectors, with transportation making up 14 and 8 percent of their output, respectively. Moreover, households consume about 10 percent of all fuel products. In conclusion, Yemen is among the countries with the lowest fuel-pump prices in the world. The petroleum subsidy makes up 85 percent of all public spending related to economic affairs and is more than the total spending on health, education, and social protection combined. Especially social transfers and investments in infrastructure.

Source - Read more

Diesel Subsidies and Yemen Politics: Post-2011 Crises and their Impact on Groundwater Use and Agriculture Al-Weshali, A.; Bamaga, O.; Borgia, C.; van Steenbergen, F.; Al-Aulaqi, N. and Babaqi, A. 2015.