Abu Dhabi: Petrol prices in the UAE may decline following the Abu Dhabi National Oil Company's (Adnoc) decision to acquire 74 petrol pumps belonging to Emarat in Sharjah, Ajman, Umm Al Quwain, Fujairah and Ras Al Khaimah, an Abu Dhabi government official told Gulf News yesterday.
Emarat's operations in Dubai will not be affected.
“The reduction of the price will come as a reaction to the recent calls by some Federal National Council (FNC) members, who urged the government to bring petrol prices in line with those in the rest of the GCC nations”Tweet this
Petrol is sold at a fixed price in the UAE, which has reserves of 97.8 billion barrels of crude. The government provides subsidies to retailers when the oil price crosses the break-even level. However, petrol in the UAE is expensive compared to other Gulf Cooperation Council countries.
Three retailers, Adnoc Distributors, Emarat and Emirates National Oil Company (Enoc) and its subsidiary Emirates Petroleum Products Company (Eppco) meet the domestic demand for petrol in the UAE.
"The reduction of the price will come as a reaction to the recent calls by some Federal National Council (FNC) members, who urged the government to bring petrol prices in line with those in the rest of the GCC nations," Numan Ashour, a UAE-based economist told the Gulf News.
"The prices of fuel will be reduced and the government will partially subsidise fuel prices," he added.
A top-ranking oil industry source told Gulf News that the takeover by Adnoc units will enable Emarat to cut its losses. "Emarat is losing Dh80 million in the Northern Emirates section of its petrol sales business every month due to petrol subsidies. This deal means Emarat will save at least Dh900 million every year."
He added that the Abu Dhabi government subsidises Emarat's petrol sales.
Ashour also said this move followed recommendations by the FNC and studies by committees which analysed the hindrances to foreign investments. Prices of oil and fuel in the UAE topped the list.
He reiterated that after the meeting of the GCC states recently, the issue was that the UAE fuel prices are much higher than its counterparts in the Gulf region which has created a common market in 2008.