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Continued fuel shortages raise concern in Somaliland

By Barkhad Dahir in Hargeisa

somalia-hargeisa-petrol
A man at a Hargeisa gas station fills up his car for the week. The region has experienced severe patrol shortage for weeks. [Barkhad Dahir/Sabahi]
Drivers in the Somaliland region are complaining about rising fuel prices after two ships that were expected to come to the port town of Berbera in mid-August failed to arrive.

Shaqale Yusuf, a 31-year-old taxi driver in Hargeisa, said fuel shortages and inflation of prices have exacerbated in the past two weeks leaving him at times unable to work.

Since the shortage, he had to leave his vehicle by the roadside overnight, after driving to ten petrol stations unable to find fuel, and on occasion has stayed home from work because of inflated prices, he said.

Prices vary but in general petrol stations have increased their prices from $1 a litre to $1.40 in the past two weeks, he said, adding that a number of taxi drivers he knows also stopped working because of the prices.

To afford the fuel and keep working, Yusuf said he was forced to raise the rate he charged customers. “This resulted in many people [who use taxis] being unable to afford the payment and some of my customers have opted to stop using taxi services,” he said.

Before the fuel shortages, he used to make between $40 to $60 daily, but now he gets only $20 on a good day, he said.

Similarly, Abdinur Mohamed Osman, a minivan driver who works between Hargeisa, Berbera and Burao, said he has not had any passengers since the end of August. He said it no longer makes sense to work because “all the money I make would only cover my petrol costs”.

For his part, government-owned Berbera Fuel Storage Tanks Director Saleban Said Ali acknowledged there is a petrol shortage, but said the government is not to blame.

“The government does not import fuel, and our role is to provide storage services for the companies that import the fuel,” Ali told Sabahi. “[Their] supplies run out, therefore the shortage in fuel is coming from the fuel companies.”

The issues stemming from the shortage of fuel came after two ships that were expected to come to Berbera in mid-August failed to arrive, Chairman of the Somaliland Chamber of Commerce Mohamed Shukri Jama said.

To extend supply, the Ministry of Commerce, the managers of government-owned storage facilities and the import companies agreed to ration the available petrol and sell it in quotas of 20 barrels per petrol station at a time until more petrol arrives, he said.

“Whenever there is talk of a shortage, every person wants to purchase [more than] what he or she needs. Therefore, [retail] petrol stations have been told to ration it and sell a maximum of ten litres to each vehicle,” he said.

Rationing of petrol was expected to end last Friday (September 5th) with the arrival of a ship carrying fuel from the United Arab Emirates, but as of Wednesday (September 10th) morning, officials said the ship had not arrived in Somaliland.

Problems with fuel importation, storage

Yassin Alase, who teaches business administration at the University of Hargeisa, said the government should review how petrol is imported to ensure shortages no longer occur.

“When the price of [petrol] goes up, the price to produce [goods and services] also increases, which causes inflation and a person’s salary to no longer be sufficient [for his livelihood],” he said. “That affects everyone in Somaliland.”

Although privatisation has generally helped improve the economy and service delivery, he said, the regional government should have more control over industries such as the energy sector, and consider a private-public partnership to provide better oversight to companies importing fuel.

Only six privately owned companies work in the business of importing fuel into Somaliland.

“The government should own 20% of petrol import [companies],” Alase said, adding that the companies should also be better vetted to ensure they are financially able to carry out the work and meet market demands.

In addition, he said, the government should increase the number of tanks used to store fuel because today’s market demand is much higher than what it was when the storage facilities were first created.

Currently, due to the limited number of tanks used to store fuel, the companies bring the fuel in by alternating in accordance with a schedule laid out for them by the Ministry of Commerce, Chamber of Commerce Chairman Jama said.

Worry over price fluctuations

Meanwhile, drivers who spoke to Sabahi said they are worried that prices will not return to previous levels even if the companies import enough fuel and shortages subside.

“In the last seven years, at least, we have gained experience in price fluctuations,” said Osman, the bus driver. “In Somaliland there is never a price reversal in the cost of goods once they have seen a price rise.”

If the Somaliland government does not so something, the inflated prices will halt business activity and negatively affect the lives of civilians, Yusuf the taxi driver said.

Ali, the director of the Berbera fuel storage facility, said the retail price of one barrel of petrol is $185, while diesel is $175.

“That has not changed, and the increase [in fuel prices] is coming from the stations not due to an increase by the companies that import,” he said.

The government monitors the price at which importing companies sell to retail stations, Ali said, but it was unable to control the prices at which those stations sell to consumers.

Source: Sabahi Online

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