Dubai retailers say diesel prices will remain steady

Abu Dhabi: Oil retailers in Dubai will absorb the increased costs of importing diesel and keep domestic prices of the fuel steady for the time being despite a near 9 per cent surge in global crude prices to a record $139 a barrel on Friday, a spokesman for Emirates National Oil Company (Enoc) and Emirates Petroleum Products Company (Eppco) said yesterday.

"For us, it's business as usual. We are not increasing at this stage. The diesel price will remain as it is," said the spokesman for the two oil retailers. An Emarat spokesman wasn't available for comment.

The three Dubai oil retailers buy diesel at international prices and then decide on adjusting their domestic prices, based on the landed cost of the oil product.

The oil retailers last raised diesel prices on May 27 by Dh1.50 a gallon to Dh18.50 per gallon, citing increased crude and diesel prices. The diesel prices have held steady since.

Unlike the capped petrol prices in the UAE, which are set by the government, diesel prices in Dubai move in tandem with the global price trends for crude and diesel.

Last week, Enoc, Eppco and Emarat were discussing the possibility of cutting diesel prices after global crude prices had cooled almost 10 per cent over the previous two weeks to about $123 a barrel.

However, international crude prices suddenly surged more than $16 a barrel over a two-day rally - Thursday and Friday - on a slumping US dollar and mounting tensions between Israel and Iran.

"If the oil prices continue to rise, there will be no other alternative for the Dubai oil retailers, but to raise diesel prices all over again," said a source at one of the retailers.

Being a widely used industrial and commercial transportation fuel, any increase in diesel prices stokes inflation as it increases costs across the board which, inevitably are passed on to the end users.

For us, it's business as usual. We are not increasing at this stage. The diesel price will remain as it is."

A spokesman for Enoc and Eppco