Saudi Arabia begins pumping oil derivatives to power 70 Yemeni power stations
In a strategic move aimed at bolstering the stability of Yemen's energy sector, the Saudi Development and Reconstruction Program for Yemen ( SDRPY) has begun supplying power plants with petroleum derivatives. The first shipments departed from the headquarters of the Yemeni Petroleum Company (PetroMasila) to cover the needs of more than 70 power stations across various Yemeni governorates. This initiative comes in implementation of directives issued by the Saudi leadership on January 14, 2016, and reaffirms the Kingdom's ongoing commitment to supporting the brotherly Yemeni people in all circumstances.
Grant details and amount of support provided
The new grant includes a substantial amount of 339 million liters of diesel and fuel oil, with a total value of approximately US$81.2 million. The distribution mechanism is designed with meticulous and comprehensive governance to ensure the fuel reaches the end user. A committee comprised of several Yemeni regulatory and executive bodies oversees the distribution process based on the actual needs of each station, thus guaranteeing equitable distribution and operational efficiency.
Economic and financial impact on the Yemeni state
This grant is not only important for providing electricity to homes, but also for providing a significant boost to the overall Yemeni economy. It directly alleviates the financial burden on the Yemeni government and the Ministry of Finance by saving substantial sums that would otherwise have been spent on purchasing fuel from international markets. Furthermore, it plays a pivotal role in supporting the Central Bank of Yemen by reducing the demand for hard currency (dollars) to import petroleum products, thus contributing to the stability of the Yemeni rial's exchange rate, curbing inflation, and ultimately preserving the purchasing power of Yemeni citizens.
Enhancing basic services and living standards
On a service and social level, electricity is the lifeblood of existence. This grant will ensure the continued operation of hospitals and medical centers that rely on electricity to power vital equipment, as well as guaranteeing the efficient functioning of schools, universities, ports, and airports. Improving the reliability of the electricity grid will positively impact security and social stability, stimulate commercial and industrial activity, and support Yemen's pursuit of economic recovery.
Strategic partnership with the Yemeni national sector
In a precedent that strengthens the capabilities of the Yemeni private and public sectors, a fuel derivatives supply agreement was signed with the national company PetroMasila on January 21, 2026. This step reflects the Saudi program's vision not only to provide support but also to empower Yemeni national companies and revitalize their role as active partners in the energy sector, thereby creating job opportunities and enhancing the sustainability of local institutions.
A long history of Saudi support for the energy sector
It is worth noting that this grant is an extension of a series of previous grants provided by the Kingdom of Saudi Arabia to the electricity sector in Yemen. The Saudi program has provided previous grants, including a $180 million grant in 2018, the larger $422 million grant in 2021, and a $200 million grant in 2022. This continued support underscores the Kingdom's commitment to preventing the collapse of Yemen's energy sector and ensuring the continuity of essential services for the Yemeni people.
