Yemeni gas vendors take the fight to the government
A dozen resolute men have been staging a sit-in in front of the Yemeni Gas Company (YGC) for over a month now. The group are minor-league gas vendors who say until the government issued a price cap in February, they were making a profit off the 15 kilograms cylinders they sell. Now they want the YCG to defend their right to set their own price for the cylinders, which are used in homes and restaurants all over Yemen for cooking and household needs.
The Ministry of Oil and Minerals oversees the state-run YGC that controls gas prices and sells the commodity to merchants. In 2010, the Ministry tried to set a price cap, but it was never enforced. Nearly three years later, they have issued a regulation that vendors cannot sell the cylinder for more than YR1,200, about $6.
Mohammed Al-Bawsani, technical affairs director at the YGC, says the decision was calculated to protect consumers.
“Prices have gone up,” he said. “Gas agents sold cylinders for [high] prices.”
Enraged gas vendors say the move is unfair. The maximum profit they can now earn is YR 90, or 42 cents, because YGC sells the cyclinders at wholesale for YR1,110, around $5.20.
This decreased profit is too little, the sellers say. Naji Al-Soma’i, a protester, said it doesn’t take into account sellers' costs like transportation, insurance fees and employees’ wages. They estimate that after all of this, they make around a YR40, or 18 cent, profit.
“I wonder whether it’s right to decrease the profit sellers get currently,” said Ibrahim Al-Janad, the head of Gas Sellers’ Assembly in Taiz, who called the new price cap unsustainable.
Gas sellers say that on average they used to make a YR160, or 74-cent, profit per canister prior to Yemen's revolution in 2011, when the industry took a big hit and prices skyrocketed.
During the revolution, consumers paid around YR2500, about $12, for a cylinder, a burden many families could not afford.
Because of this, many residents have praised the ministry’s decision, but that doesn’t mean vendors are falling in line.
“I went to several shops, but all of them insisted on selling a cylinder for YR1300 [over $6],” said Rafeeq Al-Zoraiqi, a local resident.
In his area, Abdulla Al-Aizari said vendors still sell the cylinders for YR 1400, or around $6.50.
The Oil Minister has asked citizens to report such violations, but enforcement has been very loose.
Consumers say they are also being cheated in other ways. Maher Ghailan, a local resident, says some gas cylinder stations are trying to reduce their profit deduction by not filling the cylinders to their full capacity.
Unregulated gas selling
While a price cap gave gas vendors the fuel they needed to start protesting, they are also upset by an emergence of unliscensed gas shops, which undermines their business.
These small, random shops surfaced during the revolution, but typically do not abide by the rules and regulations that govern the certified ones.
“Although rules stipulate the distance between two gas-selling shops should be 500 meters, gas is currently sold in a grocery beside me and my neighbor is also selling gas inside his yard,” Mohammed Al-Weshah, a protester, said.
"Many people sell gas in their shops without safety procedures which may cause terrible incidents,” he added.
Al-Weshah says nobody is regulating these pop-up shops.
Fatima Abdulfatah, lives next to an unregulated seller, which makes her feel uneasy. She says such shops should not be allowed in populous areas.
“I feel as if I’m living beside a bomb store that may explode at any moment,” she said.
Unliscensed shops are reported to lack even the smallest safety measures like a fire extinguisher.
YGC representatives agree that these shops are hazardous not only to business but could also lead to hazards like fires.
Although Abduljaleel Qaed, the director of the facilities department at the YGC, says they create criteria needed for shop certification, it is not their job to prosecute perpetrators.
“We coordinate with the Civil Defense [Ministry] and its branches across Yemen to inform them of gas shops that lack safety procedures,” Qaed said.
The Civil Defense Ministry says they are doing their part despite an unprecedented number of new unregulated gas vendors appearing every day.
“We pay field visits to make sure that the gas shops adhere to safety procedures in terms of being built with anti-fire materials and [are located] far from highly-populated areas such as schools,” said Colonel Abdulkareem M’iad, the director of the Civil Defense Ministry.
As with many government agencies, they say political instability since the revolution has inhibited their work.
Currently the Ministry of Public Works, the Consumers Protection Association and Gas Sellers Assembly say they are coordinating efforts to solve the problem.
In mid-February, a ministerial committee was created to tackle the issue of closing unlicensed shops.
- First it was the US and shale, but now, Saudi Arabia's toughest oil contender is emerging right next door
- Self-sabotage: Israel's fleeting natural gas revolution
- Saudis have a lot on their mind nowadays, but oil will always be their biggest worries
- King Abdullah's death and the 'fear premium' in Saudi oil markets
- Mixed signals: why King Abdullah's passing could not have come at a worse time for Saudi's oil sector