SHARJAH, 31 August 2005 — Petrol and diesel prices will go up by an average of 31.2 percent throughout the UAE with effect from tomorrow, the Emirates News Agency (WAM) reported.
The agency said petroleum distribution companies throughout the country have decided to increase the price of a gallon of petrol by 1.5 dirhams, while a gallon of diesel will also go up by 1.40 dirhams.
The increase will bring the price of a gallon of petrol (octane 95 “special”) to 6.25 dirhams and octane 98 to 6.75 dirhams. A gallon of diesel will be sold at 7.70 dirhams, up from the current 6.30 dirhams for a gallon
The increase, the distribution companies said in a statement, was part of an effort to minimize the mounting losses the petroleum distribution companies in the region continue to suffer year after year. The companies said they can no longer bear the losses in view of the current international prices for oil.
Oil price, which used to be $34 per barrel n 2003, hit a record $70 this month.
The businesses of these companies have been suffering high financial losses for years from their fuel sales,” said the statement.
“The losses are now colossal as global prices have shot up to unprecedented levels, it said. At today’s prices the loss per gallon is over 4.10 dirhams for petrol at the pumps.
The companies expressed understanding on the additional burden the price hike would put on the shoulders of vehicle owners in the country. They expressed deep regret on the inconveniences the decision may cause to motorists. The UAE last raised petrol prices in April 2004 by up to 19 percent but retailers continued to complain that they were losing money because of the government ceiling on petroleum prices.
In October last years, the two private-owned distributors - the Emirates Petroleum Products Company (EPPCO) and Enoc - reached a point where they warned that they would close down their petrol stations unless the government allowed them to increase prices by lifting a ceiling on prices or subsidized petrol and diesel. However, they backed down from the warning later on.
At that time the companies said they were losing 1.4 million dirhams a day as a result of the government ceiling on price of fuel.
The Abu Dhabi National Oil Company (ADNOC) and Emirat — both fully owned by the UAE federal government — said then that they would abide by the government ceiling and would not increase gasoline prices.