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Increased prices and fuel import taxes in Somaliland are trickling down to the consumer, while the local government says it is attempting to reduce the burden by embracing free market competition.

Ministry of Trade, Industry and Tourism director of commerce Aden Elmi Ahmed said fuel prices have increased as a result of conflicts in some parts of the world and pirate activities in the region.

"Even though there are many obstacles [that have led to increases in fuel prices], we believe that business owners can add additional profit price, which burdens the customers," Ahmed told Sabahi. "Business owners are allowed to benefit from the increase in fuel price, but we urge them not overburden the community."

To address the rising fuel prices, Ahmed said his ministry is embracing the free market economy and allows competition between businesses. "We allow everybody who is able to import fuel from any destination worldwide," he said.

Ahmed said the government is trying to curb impact of the rise in fuel prices for the consumer. "If the price of fuel fails to decrease, the government is mandated to review the tax imposed on imported fuel," he told Sabahi.

Abdiaziz Gahnug, who owns a filling station in Hargeisa, told Sabahi last week that the price of diesel was $215 per barrel, compared with $167 in March, and a barrel of petrol was $209, compared with $197 in March.

"The price of fuel has risen to the historic high set in 2007, and its market prices are close to the prices in those days," said Hassan Mohamed Egeh, manager of Red Sea Petroleum Company.

Egeh attributed the rising cost to piracy, unrest in Libya, sanctions imposed on Iran, instability in Bahrain and underproduction in Iraq.

The government of Somaliland last year increased the tax collected from oil imported from Gulf countries. The government taxes a barrel of diesel at about $12.18, up from $11.60 in 2010, and petrol at $15.60, compared to $14, Egeh said.

Over the past month, the Red Sea Petroleum Company, Hass Petroleum and SOM Petroleum purchased ships to avoid the high costs of hiring ships from foreign companies, Egeh said.

"Most petroleum companies in Somaliland bought ships after they faced obstacles from hiring foreign ships due to fears of being hijacked by pirates. The problems we had in hiring foreign ships is now gone and we feel relieved," Egeh said, adding that his company bought two ships.

"The companies have the capacity to import oil from wherever they want because they have their own ships and they have no fear of pirates, or hiring foreign ships that impose certain conditions," Egeh said.

The rise in fuel prices is impacting the cost of living at the consumer level as well.

Daud Ibrahim Ali, 27, a bus driver in Hargeisa, told Sabahi that he ferries 270 to 300 people to work every day, in addition to 40 students he takes to and from school.

Ali said buses serve a crucial role for the people of Hargeisa, who often need the public transport system to go about their daily lives.

Hussein Ahmed Mohamoud, chairman of a bus owners association in Hargeisa that represents 800 privately-owned buses, said the rise in fuel prices has seriously affected the daily routine of buses.

He said the government should reduce the import tax on fuel to reduce the cost of transportation for citizens.

"The biggest obstacle facing us now is the increased fuel prices, so we have two options in mind now -- we will either stop driving or will increase the bus fare," Mohamoud told Sabahi.