The UAE is looking to regulate petrol prices in order to better reflect the international trend, the country’s oil minister Suhail Mohammed Al Mazrouei said.
The minister was answering a question raised by Federal National Council (FNC) member Hamad Ahmad Al Rahoumi about why oil prices in Emirates hadn’t dropped despite the fall in the value of international crude.
Al Mazrouei told the FNC that the government has submitted a proposal to the cabinet that will enable consumers to benefit from lower oil prices, local daily Gulf News quoted him as saying.
He said that the proposed scheme by the ministry will reexamine energy subsidies and study who can benefit from such price cuts.
Al Mazrouei did not elaborate on whether the government is looking to completely revoke fuel subsidies or whether subsidies will apply selectively to certain demographics in the country.
Petrol prices in the UAE are among the highest in the GCC region despite being subsidised by the government. Although prices in the country are capped, the government has previously made occasional changes to reflect the international trend.
Al Mazrouei added that the UAE’s current oil price policy has also led to a massive loss for major fuel retailers.
“Losses of the four fuel distribution companies caused by a subsidised petrol price reached Dhs38 billion over the last 10 years with ADNOC alone losing more than Dh6.4 billion in 2014,” he told the FNC.
In line with that, Al Mazrouei said that the government is also planning to launch a new committee to oversee oil pricing.
He added that it is important that the government set prices and not oil companies, as it is done currently in the UAE.
The ministry’s statement is in line with fuel retailers, who have maintained that the current pricing policies are not economically viable.
In 2011, Dubai-based fuel retailer ENOC said that it 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 shut down about 82 service stations in Sharjah, Ajman, Fujairah, Umm Al Quwain and Ras Al Khaimah.