By Himendra Mohan Kumar, Staff Reporter Published: May 23, 2008, 00:19
Abu Dhabi: The price of diesel in Dubai is set to rise again in line with surging international crude prices that are currently trading at lifetime highs past the $135 mark per barrel.
Oil industry sources told Gulf News on Thursday that the Dubai-based oil retailers – Emirates National Oil Company (Enoc), Emirates Petroleum Products Company (Eppco) and Emarat may raise diesel prices by up to 50 fils a gallon, or more at the pumps, to bridge the gap between domestic prices of the fuel and its prevailing price in the international market. They said the prices of industrial diesel may also be increased.
Unlike the capped gasoline prices in the UAE, whose prices are state-set, diesel prices in Dubai move in tandem with the global price trends.
Diesel, in Dubai, was selling at Dh17 per gallon yesterday. Since October 23, diesel prices in the emirate have gone up more than 54.5 per cent.
A spokesman for Enoc/Eppco said a review of diesel prices will take place next week. “We really need to review the prices and decide,” he said.
“There’s no option but to raise prices. We are buying diesel at international prices and we need to keep adjusting it, based on the landed cost of the oil product,” said a source at Emarat.
Another company source said while earlier the price review for diesel used to be done twice a month, now the review by the oil retailers is continuous as the crude prices on the world markets are touching new record highs almost every other day.
“There is no margin for the oil retailers. In fact, there’s a negative margin on diesel sales. We are a federal government company. People require transportation and we are providing people-oriented service,” he said.
“Over the last eight years, crude oil prices have gone up 80 per cent in euro terms, while in dollar terms, due to the weakening currency, the prices have surged 240 per cent,” the source added.
Abu Dhabi, in contrast, has kept diesel prices steady at Dh8.60 a gallon. The price difference in diesel between Dubai and Abu Dhabi now is more than 97.6 per cent and this gap will widen further if the Dubai oil retailers were to increase prices all over again.
“Abu Dhabi can afford to keep diesel prices steady as they have their own crude and refinery. There’s just no comparison,” said a source. Adnoc officials weren’t available for comment.