SHARJAH, 4 September 2005 — Prices of petrol and diesel are expected to be raised by another 20 percent in the UAE, where a 31 percent increase took effect on Sept.1, according to a report in the mass-circulation Al Khaleej daily.
The paper quoted informed sources in Abu Dhabi as saying that a decision was already taken to increase the prices by 50 percent; the 31 percent increase which has already taken effect is the first phase of the hike and the second phase will involve a 20 percent increase in the next six months.
The increase comes in the form of the government lifting a ceiling on prices of petroleum products and thus allowing distributors to raise prices.
Al Khaleej quoted its sources as saying that distributors had been demanding that the increase should be 100 percent at one stretch. They cited substantial losses as the reason for raising such a demand and three of the distributors were about to halt operations and close down. With the increase which took effect on Sept.1, a gallon of petrol (octane 95 - “special”) now costs 6.25 dirhams and gallon of octane 98 now sells at 6.75 dirhams. A gallon of diesel costs 7.70 dirhams, up from the current 6.30 dirhams.
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.