A steep rise in diesel and building-material prices has brought construction work to a standstill across government-controlled parts of Yemen, leaving daily labourers without reliable income. The disruption has intensified since regional fighting affected fuel supplies, shipping routes and insurance costs.
In January, 20 litres of diesel cost about 25,000 Yemeni riyals, or $17, in these areas. The same quantity now costs roughly 45,000 riyals, or $30. Higher transport and machinery expenses have spread through the construction supply chain, forcing homeowners and contractors to suspend projects that no longer fit their budgets.
Workers lose jobs as projects are paused
Fuad Mohammed, a 46-year-old construction labourer in Taiz, has worked in the industry for more than 25 years. Before the latest regional conflict, he could usually find employment for around two weeks each month. He has since gone several months with almost no work.
One project began in May after a woman saved enough money to build a family home. Construction stopped when another round of price increases made the original budget insufficient. Mohammed said contractors he previously worked with had received similar instructions from homeowners waiting for regional conditions to improve.
The price of a truckload of sand has climbed from 130,000 riyals to 190,000 riyals. A metre of window glass rose from an average of 90,000 riyals to 130,000 riyals. To compete for the limited work available, Mohammed reduced his daily rate from 25,000 riyals to 20,000 riyals, but still struggles to provide basic necessities for his family.
Shipping disruption reaches a vulnerable economy
An official at the Yemen Petroleum Company in Aden attributed the diesel increase to tighter supplies, higher global fuel prices and disruption around the Strait of Hormuz. Transportation and maritime-insurance charges have also risen. The official described the increase as temporary, although its duration depends on regional conditions.
Wafeeq Saleh, executive director of the Taiz Center for Yemeni-Gulf Studies, said Yemen is particularly exposed because it imports nearly 90% of what it consumes. Changes in global commodity prices and freight costs therefore reach the domestic market quickly.
The effects are not uniform across the country. Yemen’s war has produced separate economic systems in Aden and Sanaa, with divided central-bank operations and different exchange rates for the riyal. In Houthi-controlled areas, including Sanaa, 20 litres of diesel cost about 9,500 riyals, roughly $18 at the local exchange rate, and construction has not yet faced the same abrupt shock.
Saleh suggested that existing fuel inventories may have delayed the increase in those areas. He warned that prices could rise when suppliers must replenish stocks at current international rates. Disruption in both the Strait of Hormuz and the Red Sea has added uncertainty to Gulf oil transport and contributed to crude prices moving above $100 a barrel.
Homeowners face a difficult choice
Lutf Zuraiqi, 58, paused construction of a home after the cost of materials exceeded his savings. He expects prices to ease if the regional conflict ends and is waiting in the hope that he can complete the project.
Contractor Mohammed Jameel takes a more cautious view. After more than four decades in the industry, he said material prices have tended to remain high once they increase. He has reduced his rates and profit margins to keep some contracts active, but expects labour costs and total building expenses eventually to rise again.
For daily workers, the timing of any recovery is critical. Their income depends on projects restarting, yet homeowners are reluctant to commit more money while diesel, sand, glass and transport costs remain unstable. The result is a cycle in which higher regional costs halt local construction, reduce wages and deepen hardship for families already affected by more than a decade of war.
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