12 February 2013

Somalia: Puntland Finance Minister Explains Yemen Petroleum Ban


Bossaso, Somalia — The Puntland government passed a law banning all petroleum imports from Yemen. GO in an exclusive interview has asked the Puntland Minister of Finance Farah Ali Jama the reasons behind that ban, Garowe Online reports.

Minister Farah can you explain why the Puntland government banned petroleum imports from Yemen?

The law was passed January 24 2013 and the reasons for doing so are many. The economic implications of petroleum being imported from Yemen have affected the market in Puntland. Many businessmen/women have informed the Puntland government of the economic implications of petroleum from Yemen. Small fishing boats that are registered as fishing boats have been found to import petroleum from Yemen without going through the proper channels. These fishing boats are sometimes owned by Somalis or Yemenis and operate in Puntland waters, these boats have begun unlawfully importing and occasionally lawfully importing petroleum.

So how do these boats unlawfully import the petroleum to Puntland?

The boats come into Puntland through the port of Bossaso on occasion or dock on the vast coast of Puntland. The fishing boats that usually bring the petroleum in from Yemen are registered from Puntland as fishing boats but carry petroleum which they bring in without going through the proper channels or tax system. The close proximity between Yemen and Puntland makes it easier for them to bring in the petroleum without being caught. The boats use both Yemeni and Puntland flags whenever it is convenient to do so. They also load the boats with other goods when arriving in Puntland. The biggest problem we have is the lack of regulation of boats coming into Puntland from Yemen which has also affected our fishing industry. Those who import petroleum from other countries through the proper channels have been adversely affected by the influx of unregulated petroleum coming from Yemen. There has been a drop in port traffic due to this unregulated supply of petroleum to Puntland.

Why do businessmen/women import petroleum from Yemen and not other petroleum rich countries?

Because mainly the petroleum from Yemen is cheap low quality petroleum that has attracted many importers and led to a surge in petroleum coming from Yemen and not enough of other supplies arriving at the port.

What affect or implication or outcomes does the banning of petroleum have on the economy in Puntland?

The outcomes of this ban we anticipate will be positive ones, due to the fact that petroleum being imported into Puntland will be regulated. Businessmen/women are very much tied to Gulf States for trade, whether it is construction material, furniture, food or garments. That being said people who import petroleum will be offered the same rates as Yemen and will be able to import petroleum freely from other countries except Yemen. We anticipate a boost in market and a return in port traffic because more and more importers will have to diversify their import load since the cheap low quality oil from Yemen is banned. The implications might be that some Puntland residents and traders might not understand why the ban is in place but the security and economic impact of petroleum has negatively affected Puntland residents but has helped some profit. Is security one of the issues why Puntland banned petroleum imports from Yemen?

Yes, security is one of the reasons why Puntland banned the petroleum imports from Yemen; due to several reports of arms being brought into Puntland from Yemen to terror cells operating in the Golis Mountain Range. The surge of petroleum being imported to Puntland began after former Yemeni President Ali Abdullah Salah stepped down. Due to these compounded negative affects we have [Puntland] stopped petroleum imports from Yemen.

Puntland President Abdirahman Mohamed Farole spent many weeks in Bossaso meeting with businessmen/women to smooth out economic concerns. Taxes at the port were lowered last year after a dip in traffic at Bossaso port. The Puntland government says that the decision to ban petroleum from Yemen will help foster a surge in traffic at the Bossaso port.

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