Dubai Members of the Federal National Council from Dubai complained the UAE is not among the countries with lowest retail price of petrol, while every other Gulf country makes it to the world’s top 10 list for cheap petrol.
The representatives, however, did not agree on selling petrol at a blanket price for citizens and foreigners.
They eventually agreed on a motion to set up an ad-hoc committee to study the issue and submit the findings to the council.
Ahmad Ali Al Za’abi, a member from Sharjah, said other Gulf countries sell petrol at cheaper prices, while the UAE produces more oil than many of them including Oman.
“High prices of petrol and fuel heavily affect the life of the people with low and medium income, not to mention the country’s development as a whole,” Al Za’abi said.
He suggested setting up more refineries to meet the demand for petrol.
The average petrol price in Saudi Arabia is 46 fils per litre.
Following the last rise of 20 fils in July 2010, the cost of the fuel in the UAE is the highest in the GCC at Dh1.72 per litre, which is four times as high as in Saudi Arabia and more than thrice in Qatar [87 fils/litre].
Rounding up the top five list are Manama in Bahrain, where a litre of petrol can be bought for as much as 75 fils, and Kuwait 81 fils/litre.
Bin Dha’en Al Hamili, Minister of Energy, said the Government is indirectly extending heavy subsidies to petrol, while the price of fuel oil is set according to free international market price.
“Petrol distribution companies incurred losses of around Dh8.5 billion or nearly Dh5.5 per gallon of petrol sold last year and these losses are expected to increase to Dh12 billion this year if the oil prices are to steadily increase at the current rates,” Al Hamili said.
The minister rejected the argument that the higher petrol prices are cause of the higher prices of goods and services. “Energy accounts for only 10-13 per cent of the production cost, so prices of goods and service should increase only by this rate in the event of any increase in fuel prices.”
Al Hamili also argued that petrol prices are being fixed internationally and subsequently building refineries may not affect the prices.
Mohammad Ahmad Al Mur, the Speaker of the House, said that in a country where the citizens are a minority, billions of subsidies might go to foreigners.
Ahmad Abdullah Al Amash, a Member from Ras Al Khaimah, said subsidised petrol should be sold to citizens only.
However, Salem Mohammad Al Ameri, a representative from Abu Dhabi, said everybody, be them citizens or residents in the country, should benefit from cheap petrol.
