UAE petrol prices could rise another 40 fils

Fuel prices at gas stations could go up by another 40 fils if the local distributors decide to bring them up to match international petrol prices and add their commission and marketing costs, Emirates 24|7 calculations show.

Despite the fact that the local retailers have increased the price of petrol in the UAE by 35 fils since the beginning of the year, the retail price is still more than 20 fils cheaper than conventional regular petrol spot prices in Singapore, data shows.

The basic grade of petrol costs Dh1.72 at local filling stations while refined petrol (Singapore) is available for around $2 a gallon (3.78 litres), which works out to Dh1.94 a litre.

This means that the local UAE fuel retailers, which have to import refined fuel at international prices, are incurring a loss of at least 22 fils per litre, not taking into account the cost of importing, marketing and operations.

The losses would be at least double that if these costs were to be added.

Analysts and industry watchers expect that the increase in pump prices will come in two tranches, with the cost of a litlre of petrol going up to Dh2.12 (Dh8 per gallon) approximately.

A statement issued earlier this month by the distributing companies, when they raised the prices for a second time this year, said the companies were looking to increase fuel prices gradually to get them on a par with international prices.

“The announced rise comes within efforts to gradually mitigate accumulated and growing losses these companies are sustaining due to continuous surge in cost of the product,” the statement added.

This would imply that if local companies are to match international prices and recover their accumulated losses, they would be hiking fuel prices by at least another 40 fils.

On top of that, if fuel prices in the international market go up, UAE consumers would be in for another price-hike.
 

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