Competition is expected to force other major oil retailers to follow Tuesday's cut by Abu Dhabi National Oil Company (Adnoc) Distribution in diesel prices in the northern emirates by 20 fils a litre.
Diesel is now cheaper by 60 fils a litre at all Adnoc petrol stations in Sharjah and the northern emirates as compared to Emarat, Enoc and Eppco petrol stations in Dubai and elsewhere.
In Sharjah, Ajman, Fujairah, Umm al Quwain and Ras al Khaimah, Adnoc is retailing diesel at is Dh 3.10 per litre.
However, diesel price remains the cheapest in Al Ain and Abu Dhabi region. “A litre of diesel costs Dh2.35 in Abu Dhabi and Al Ain, which is 75 fils less than the rate in Northern Emirates. A lot of diesel traders used to come and fill diesel here for resale in northern Emirates and Dubai, but now there is strict rationing system. We are allowed to sell diesel only to the vehicle tanks and not in cans or containers brought by diesel dealers,” said an Adnoc source.
Enoc, Eppco and Emarat continue to sell diesel at the previous rate. “We are selling diesel at the rate of D 3.70 per litre, which is 60 fils higher than the Adnoc rate. However, we don’t see any customers shifting to Adnoc pumps. While Adnoc stations have some limit on the amount of diesel sold, there is no such limit here,” said an Enoc manager. However, most of the Enoc and Eppco petrol stations in Sharjah and Northern Emirates are closed, either fully or partially, and customers have to depend on Adnoc or Emarat for diesel supply. “So far we haven’t heard anything from the head office about reducing diesel prices,” he added.
If Enoc/Eppco do not follow suit and slash diesel prices, vehicle owners who fill in Dubai outlets may shift to Adnoc stations in Northern Emirates. “If there is a 60 fils difference in the price of a litre of diesel, drivers will try to fill at cheaper source. They can make considerable savings by filling from Adnoc stations,” said Hameed, an Indian driver of a pick-up truck. “Saving even on fils is important for us,” he added.
Meanwhile customers have welcomed the cut in diesel price by Adnoc. “It is a welcome step and unlike countries like India where once the diesel price is increased, it is never reduced, even when the global oil price comes down. Reducing diesel prices by 30 fils per liter would have direct and indirect impact on the bottomline of companies and individuals," Syed Ahmad, a bus driver.
Fuel marketing companies in the UAE are undergoing a restructuring after Adnoc announced its plans to acquire all the 74 outlets of Emarat in Northern Emirates. Enoc and Eppco petrol stations in Sharjah and other northern emirates remain fully or partially closed.
“During recent periods, we are not seeing long queues and lines of vehicles, waiting to fill diesel. Earlier during the peak business boom, there were always big queues in front of Adnoc petrol stations. Now there is only normal business and even after reducing the diesel price by 20 fils, we don’t expect a major shift in customers from other fuel stations to Adnoc,” said a fuel station manager.
However, residents expect a reduction in petrol prices from Dh1.72 per litre for special quality and Dh1.83 per litre for super quality. The Federal National Council recently recommended that fuel prices in the UAE, one of the highest in the Middle East, should be brought down.