Dubai: The UAE may roll back plans to hike petrol prices, sources told Reuters yesterday.
The UAE, the world's third largest exporter of crude oil, had last year begun phasing out its petroleum subsidies, which cost the state hundreds of millions of dirhams a year.
"We were expecting a price hike this year but with all the protests going on in the region, I think the government will hold off until things are more stable," said an energy industry source.
Revolutions
Revolts against the regimes and economic hardships ousted entrenched leaders in Egypt and Tunisia and are shaking up nearby Bahrain, Oman and Yemen.
Oil-producing Libya has plunged into a bloody anti-government uprising.
Petrol prices in the UAE have risen 26 per cent to Dh1.7 per litre since last April, when the government introduced the first of two price hikes imposed so far.
Despite these hikes the price of petrol is still well below market rates.
All petrol stations in the UAE must respect state-controlled prices. "The only ones who will be complaining about the price hikes are the distribution companies and retailers but they are government backed anyway, so it's not a major issue," said an official from the state-run Abu Dhabi National Oil Company (Adnoc).
Support
Governments across the world's largest oil exporting region have long subsidised prices at the pump in an effort to cut living costs for residents and encourage economic growth, regardless of fluctuations on the global energy markets.
"It is just not the time for any price hike," the industry source added.
"This is a time when the government wants to calm people down, not irritate them."
