Mogadishu hit by skyrocketing fuel prices

The price of fuel in the Somali capital, Mogadishu, has more than doubled in just two weeks, sources there told IRIN on Tuesday.

Diesel - the fuel most commonly used by businesses and vehicles - went from 7,000 Somali shillings (30 US cents) per litre two weeks ago to 18,000 Somali shillings (80 US cents) by Monday this week, local journalist Liban Abdi Warsame said.

A cargo of fuel reaching the port of El-Ma'an, north Mogadishu, on Monday, had been expected to alleviate the severe shortage. However, it did not, due to a strike by the Association of Transporters - fuel tanker owners - over "higher fees imposed on them by the port management", said Liban.

There were two main reasons for the shortage, Dahir Ali, a Mogadishu businessman, told IRIN. Firstly, there had been no fuel deliveries in the city for the past month or so. Secondly, those who have fuel have been taking advantage of the scarcity "to get as much for their commodity as they can" before a new shipment arrives. "There is definitely an element of price gouging by some traders," he said.

According to Liban, the shortage and price hikes are affecting "all manner of businesses". There has been less vehicular traffic in Mogadishu and transport costs have tripled. "Bus fares within the city which cost 1,000 Somali shilling are now 3,000 shillings," he said. Transport between Mogadishu and the rest of the country has also been affected.

"Even water costs three times more than it did two weeks ago," he said. The city’s water comes from privately owned boreholes powered by generators that run on diesel.

Local hospitals and schools, which depend on generators for their energy, have also been been affected, Liban added.

A local economist, Mohamed Ali, told IRIN that another reason for the shortages was that traders were unwilling to keep in stock large quantities of any commodity due to the continued depreciation of the Somali shilling against the dollar. One US dollar exchanged at 19,000 Somali shillings on Tuesday, Mohamed said, adding: "The shilling can go up or down against the dollar in a day two or three times."