Dubai transport businesses hit by high diesel prices

Abu Dhabi: Transport businesses in Dubai are reeling from the impact of high diesel prices, which have nearly doubled in a year, and transporters say they have been forced to pass on fuel price hikes to customers.

Some are contemplating yet another tariff hike. The transporters agree that every time they raise their tariffs, it adds to the inflation, but also say that they are helpless, as absorbing the cost will likely put them out of business.

"Constant hike in diesel prices is the root cause of inflation. We have already increased our tariffs six times this year and we are going to increase it again, by at least 10 to 15 per cent," said Ranjit Singh, business development manager with Weiss-Rohlig UAE, a Dubai-based German-Austrian logistics company.

"We have to at be on a par with the market rates. Since UAE is a major trading hub and the businesses are expanding, work won't stop," he added.

"We are operating 22 trucks in the UAE and increases in the price of diesel is hurting us. We will have to raise our tariffs by more than 10 per cent, otherwise we can't survive," said Gunter Rochau, general manager for Trans1, a Dubai company.

Singh said the cost of transporting a loaded truck from Jebel Ali to Sharjah port about a year ago was Dh450-Dh500.

"The rate is now Dh1,050 and people are happily paying it," he said.

However, Mohammad Sadiq Abdullah, manager for the Dubai-based Al Aweer General Land Transport Company, said some industrial houses that are importing items have lately been complaining.

"Many orders are now being cancelled. Clients are complaining about high tariffs as our rates have doubled in the last one year. But, we can't do anything about it," said Abdullah.

Some transporters said their trucks are lining up at Adnoc pumps in Sharjah Airport Free Zone, where diesel is selling at less than half the price in Dubai.

"We send our trucks to be filled up at the Adnoc pumps, but this wastes a lot of time as there are long queues. With this practice, we save about Dh2 per gallon," said Singh.