UAE-based Emirates National Oil Company (ENOC) has announced that it has reduced the retail price of diesel by 20 fils to Dhs3.30 per litre across all its service stations starting from Thursday, December 18.
The price cut comes as crude oil prices dipped to their lowest this week since May 2009 to $58.50 per barrel.
“The reduction in the price of diesel is in line with the international price trends for crude and refined products and comes after a thorough evaluation of the market and discussions with petroleum retailers,” said Burhan Al Hashemi, managing director of ENOC Retail.
He added that the price cut will have a positive impact on the UAE’s economy.
ENOC, owned by the government of Dubai, has revised diesel prices previously as well to match international charges.
Last year, the retailer slashed diesel prices by 20 fils across its services stations to Dhs3.50 as oil prices fell.
Unlike petrol prices, which are capped in the UAE, diesel prices vary in accordance with the brent crude price.
Falling crude prices are beneficial to Dubai-based fuel retailer ENOC, which buys fuel at the market price and sells it at the subsided rate decided by the government.
In 2011, the fuel retailer faced a loss of Dhs2.7 billion as it was forced to sell petrol at a subsidised rate even as international oil prices soared. Since then ENOC has said that it was not viable to sell fuel at such rates, leading it to shut down about 82 service stations in Sharjah, Ajman, Fujairah, Umm Al Quwain and Ras Al Khaimah.
However, in a separate announcement on Wednesday, ENOC said that it has signed an agreement with Abu Dhabi government’s fuel retailer ADNOC to transfer about 25 of its non-operational service station facilities in Sharjah to the company.
Under the agreement, ADNOC distribution will conduct the preliminary evaluation and overhaul of the 25 service stations in a phased manner.
Following this stage, ADNOC distribution will begin rebranding the sites and operate them under its own network.