Business | Oil & Gas
Dubai diesel price could fall further
Retailers will not hesitate to cut rates if crude oil continues to slide internationally.
- By Himendra Mohan Kumar, Staff Reporter
- Published: 23:01 August 14, 2008
Abu Dhabi: Dubai oil retailers Emirates National Oil Company (Enoc), Emirates Petroleum Products Company (Eppco) and Emarat could slash the price of diesel by another 50 fils a gallon if the trend of softening international crude and crude product prices persists, sources told Gulf News yesterday.
The three retailers buy diesel at international prices and then adjust the local cost.
They have cut the price of diesel by 50 fils three times in as many weeks, bringing relief to transporters reeling from the impact of high fuel prices.
On July 29, diesel in Dubai was selling for Dh19.25 a gallon. It currently sells for Dh17.75 per gallon.
A spokesman for Enoc and Eppco said the retailers look at the international trend for at least a week before taking a decision on whether to increase or decrease domestic prices.
"If we think there's room for further reduction, we will do it," he said. No spokesman from Emarat was available for comment.
International oil prices have fallen sharply from a lifetime high of $147.27 a barrel on July 11, as an economic downturn in the US, the world's biggest oil importer, has slowed consumer demand. There are also fears that the world's second biggest economy, Japan, may be slipping into recession.
Also, the US dollar, in which crude oil trading is conducted, has strengthened against the euro, which has contributed to bearishness on the global oil markets.
On the New York Mercantile Exchange yesterday, crude oil futures for September delivery in the US were trading a shade above $116 a barrel early on.
Pressure
Diesel is widely used in the UAE as a transportation fuel. Any fuel price rise means greater inflationary pressure on the economy.
With the recent cuts, the gap in diesel price between Dubai and Abu Dhabi has narrowed to 106.4 per cent.
Abu Dhabi, however, has been able to keep fuel prices steady at Dh8.60 a gallon, as it has its own crude supply and refineries.
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