UAE: Enoc Says Current Retail Prices Unsustainable
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Tuesday, 18 October 2011 |
The Emirates National Oil Company (Enoc) has underlined the need to reform the fuel subsidy system currently in operation in the United Arab Emirates. “The current scenario, where Enoc has to bear the burden of higher international fuel prices while at the same time distributing fuel at subsidised rates, is clearly not sustainable or viable for the company,” it said in a statement.
“The cost of providing subsidised fuel to our customers is expected to lead to a loss of Dh2.7 billion for the company this year. This also has a serious impact on our ability to expand our retail network to meet the growing demand,” the company added through a spokesperson. “With the summer months over, demand for fuel across the Enoc and Eppco stations in Dubai has increased significantly. Enoc’s retail network across Dubai currently witnesses the heavy rush of motorists, especially during peak hours.”
State-owned oil firms have suffered significantly from the UAE’s fuel subsidy regime which has effectively forced them to sell fuel at a loss. Pressure to reform the system and pass the burden of rising fuel prices on to ordinary citizens has been counterbalanced by concern about pro-democracy movements and unrest in the Arab World, as outlined in the Q2 2011 issue of PetrolWorld magazine. Enoc and other state firms have been given license to accumulate more debt, but the company says that the situation will affect the fuel retail network in the Emirates. “Very few stations have been added in Dubai recently and a number of stations had to be closed to undertake infrastructure development work. Enoc looks forward to the support of the concerned authorities in addressing the concern,” added the company.
Petrolworld 18102011
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