Thursday, September 01, 2005

Fuel prices to go up by 30% September 1 :: GN

Abu Dhabi: Petrol prices at fuel stations across the UAE will be dearer by more than 30 per cent from tomorrow, following a decision by local distributors to charge more.
In response to my earlier post asking how petrol prices are set in the UAE, one commenter wrote "gas price is set in abu dhabi. the retailers have no choice at what price they sell" and another wrote, "All petrol retailers in the UAE are gubment-owned (Eppco, Enoc, Emarat, Adnoc) since Caltex pulled out. They all operate at a loss, because the Gubment sets the prices." The comments match my understanding (except that I didn't know about the Caltex exception).
And although the retailers all have outlets across the UAE and are government owned, the ownership differs. For instance, Adnoc is Abu Dhabi owned and Emarat is Dubai owned -- and their objectives are not the same. You don't read of Adnoc complaining of low prices. This suggests Abu Dhabi's objective is to share the nation's oil profit with the citizens and/or to subsidize the non-petroleum sector of the economy. The complaints of other retailers about low prices suggest their objective is profit. That retail prices were low relative to wholesale refined products gives credence to the claim that the power to set prices is in Abu Dhabi.

How low are prices? The new price of 95% octane petrol is 6.25 dirhams per imperial gallon. An imperial gallon is 1.20 US gallons. The fixed rate of exchange is 3.68 dirhams per dollar. That works out to $1.42/US gallon.

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Anonymous muebles en guadalajara said...

Little doubt, the dude is totally just.

9:38 AM  

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