UAE petrol prices up 25% in 2010

The era of cheap petrol seems to be over as the UAE's oil retailers on Monday announced a 20 fils price hike from next Thursday.

A statement issued on Monday by the distributing companies said the increase is part of liberalisation of prices and their gradual rise.

Consumers who took the earlier hike by 15 fils per litre in their stride may no longer be able to consider such “marginal” hikes as insignificant.

The second hike in three months comes as companies try to match the domestic retail price with the international oil price.

ADNOC, the national oil company that used to sell subsidised fuel is also following a market based pricing mechanism.

''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.

After the 15-fils increase in petrol price introduced in April 2010, the companies have now added another 20 fils taking the total increase this year to 35 fils.

Even though oil-marketing companies were planning another hike immediately after the 15 fils increase in April 2010,  the plan was postponed due to decline in international oil price.

Retail price of ‘Special’ petrol is Dh1.5 2 per litre, while ‘Super’ costs Dh1.63. Diesel is priced at Dh2.60 per litre.

International oil price hovers around $76 per barrel.

Due to the overall slowdown in the economy retail sales volume at petrol stations have come down and some petrol stations have reduced the number of staff.

“When the business was at its peak, we needed four boys to attend customers. Now two boys are handling four dispensing units and sometimes we don’t have customers,” said a sales supervisor in one of the oil retailers.

Plans to introduce self service scheme has also been delayed as many customers were found to be reluctant in filling themselves.

In most petrol stations, there is more demand for cheaper versions of petrol, ‘Special’ in Emarat, Enoc and Eppco and `E Plus’ in Adnoc stations.

“We always have a shortage of ‘Special’ petrol because many customers want the cheaper one. Quite often we go out of stock,” said supervisor of an Emarat petrol pump in Al Ghusais.

When oil retail price was shifted from gallon to litres, consumers made a slight gain, which now seems to have been offset by the two price hikes.

Says Mohammed Basheer, a motorist commuting between Sharjah and Dubai said: “I used to fill my tank for Dh50.

Now it has gone up to Dh58 per filling and even though it is a marginal increase, continuous price hikes can upset the budget of even middle class customers. Petrol or diesel price increase cause spiraling inflation.”
 

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