DUBAI, 19 October 2004 — The UAE’s Ministry of Petroleum has assured consumers that there would be no increase in petrol prices in the country.
The ministry on Sunday refused to entertain demands by retailers for lifting the ceiling on prices or to approve a two-dirham per gallon increase.
Sunday’s meeting in Abu Dhabi was adjourned with an agreement to continue negotiations, but no date was set for the next meeting.
At the same time, the ministry indicated that it wanted to resolve the problem by looking into means to reduce retailers’ losses. “We discussed all measures and proposals but did not take a decision,” said a ministry source.
Retailers Eppco and Enoc, both privately owned, are seeking an increase of two dirhams per gallon of petrol from the current 4.75 dirhams. They argue that they are buying petrol at 6.4 dirhams per gallon in view of the high international prices of crude oil but selling at the government-set price of 4.75 dirhams and thus incurring a daily loss of 1.4 million dirhams.
The two companies had warned that they had no choice but to stop selling petrol at their outlets by the end of this month, but they decided against this after top-level intervention. They issued a formal statement last week that they would not close down their outlets.
Adnoc and Emirat, the two state-owned retailers, have said they would continue to sell at the government prices. Representatives of the Ministry of Petroleum and the four retailers met on Sunday for talks chaired by Undersecretary Nasser Al-Sharhan, but could not arrive at a solution.
The ministry rejected the Eppco/Enoc demand for a two-dirham per gallon increase in prices saying the proposal was not in public interest and consumers would not appreciate any further hike in prices after an increase of 75 fils per gallon introduced in April this year. All the four retailers in the UAE were allowed to raise the price of diesel by four percent with effect from Sunday.
