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Diesel price rise in Dubai will aggravate inflation
Dubai oil retailers - Emirates National Oil Company (Enoc), Emirates Petroleum Products Company (Eppco) and Emarat - will raise diesel prices effective tomorrow by Dh1.50 a gallon.
- By Himendra Mohan Kumar, Staff Reporter
- Published: 00:02 May 26, 2008
Abu Dhabi: Dubai oil retailers - Emirates National Oil Company (Enoc), Emirates Petroleum Products Company (Eppco) and Emarat - will raise diesel prices effective tomorrow by Dh1.50 a gallon. The move comes following the steep rise in global crude prices.
"The new retail pump price of diesel will be Dh18.50 per gallon," an oil industry source familiar with the developments told Gulf News yesterday.
The decision to raise diesel prices came after a meeting of the oil retailers earlier in the day.
Spokespeople for Enoc, Eppco and Emarat were not available for comment when reached by Gulf News.
Increase in price of diesel became imminent in Dubai following international oil prices crossing the $135 mark per barrel recently. Crude prices on the New York Mercantile Exchange are currently hovering around $131 per barrel.
Compulsion
The need of Dubai retailers to increase diesel prices stems from the fact that the gap between international and domestic prices of the fuel need to be bridged. Unlike the capped petrol prices in the UAE, which are state-set, diesel prices in Dubai move in tandem with the global oil prices.
Dubai oil retailers buy diesel at international prices and then keep adjusting the domestic prices, based on the landed cost of the oil product. Diesel, in Dubai, currently sells at Dh17 per gallon. Since October 23, diesel prices in the emirate have gone up more than 54.5 per cent. When the next increase happens, its prices would have gone up a whopping 68.18 per cent, exerting greater inflationary pressures as diesel is widely used as an industrial and transportation fuel.
Abu Dhabi, in contrast, because it produces its own crude and processes it at its own refinery, has been able to keep diesel prices steady at Dh8.60 a gallon. Officials at the Abu Dhabi National Oil Company (Adnoc) were not available for comment.
The diesel price difference between Dubai and Abu Dhabi currently is more than 97.6 per cent and this gap will further widen to 115.11 per cent when the next price increase comes into effect in Dubai.
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