On Friday, both Enoc and Adnoc announced that they were cutting their diesel prices to Dh2.90 per litre across Dubai and the Northern Emirates. Naturally, the falling global oil price raises hopes for cutting the fuel bills of motorists and transportation companies.
Meanwhile, the UAE’s petrol prices have not changed since 2010, even though global oil prices rose sharply from about US$80 per barrel in that year to well above $100 per barrel during 2011-14, then fell back sharply below $50 in the second half of last year.
There may be some room for retailers to cut diesel prices a little further, with US pre-tax and Arabian Gulf prices close to $2.60 per US gallon (Dh2.50 per litre), but the retailers still need a margin to cover distribution and service station costs.
As for petrol prices, the current regulated price of Dh1.72 per litre for “special” is still a little less than world market levels, meaning that retailers continue to make a loss selling it. During the high oil price period of 2011-13, the official selling price was barely half the world level.
It is true that the UAE has higher fuel prices than most of its neighbours. Qatar sells petrol for Dh1.52 per litre, Oman for Dh1.06, Kuwait for Dh0.85, and Saudi Arabia for Dh0.76.
However, it is very likely that Oman at least will raise fuel prices in the near future, given its relatively limited oil production and need to plug the budget deficit. In Saudi Arabia in particular, soaring transport fuel use is eating into its oil exports.
Adnoc is in the process of taking over various Emarat and Enoc stations in the Northern Emirates and Emarat stations in Dubai to cut the companies’ losses. In 2011, the Minister of Energy at the time, Mohammed Al Hamli, said that the country’s petrol retailers had lost a total of Dh8.5 billion, and the Enoc chief executive Saeed Khoory noted that his company would lose Dh2.7bn that year from subsidised fuel sales.
The three retailers – Enoc (of which Eppco is a brand), Emarat and Adnoc, are all government-owned. Adnoc, as one of the world’s leading oil producers and refiners, can cover the losses from its profits on oil sales. Enoc runs the Jebel Ali refinery, but it still has to buy oil feedstock at world prices. Emarat, with neither refining nor oil production, is doubly exposed.
But whether the fuel subsidy is covered by the companies themselves or by transfers from the government, it represents a double cost to the country. The first part is the alternative uses for the money. It could have been spent directly on transport – for instance, improving roads, rail, metro and trams. Or, it could have gone towards investments in the country’s long-term future – health care, education, environmental protection, scientific research or pensions.
The second part is the distorted incentives caused by below-market fuel prices. They make it unattractive to use public transport and lead to more driving – hence more congestion, pollution and global warming. They discourage drivers from buying more efficient vehicles, or cleaner alternative-fuel cars such as electric, hybrid or compressed natural gas.
Heavy losses for Enoc and Emarat are a drag on the companies themselves. Subsidies inhibit them from investing in better retail networks – leading to long queues at petrol stations, with the newer districts of Dubai particularly lacking. Adnoc announced on February 4 that it would build 125 new stations, and they are sorely needed.
World-class UAE companies, such as Emirates Airline, Etihad Airways and Emaar, would not have reached their current status if they had been bearing the burden of providing heavy domestic subsidies.
Of course, drivers and businesses like lower fuel costs. But this has to be weighed against the negative consequences of subsidised energy.
Robin Mills is the head of consulting at Manaar Energy and the author of The Myth of the Oil Crisis
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Specs
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Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
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Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
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Killing of Qassem Suleimani
Profile of RentSher
Started: October 2015 in India, November 2016 in UAE
Founders: Harsh Dhand; Vaibhav and Purvashi Doshi
Based: Bangalore, India and Dubai, UAE
Sector: Online rental marketplace
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Bundesliga fixtures
Saturday, May 16 (kick-offs UAE time)
Borussia Dortmund v Schalke (4.30pm)
RB Leipzig v Freiburg (4.30pm)
Hoffenheim v Hertha Berlin (4.30pm)
Fortuna Dusseldorf v Paderborn (4.30pm)
Augsburg v Wolfsburg (4.30pm)
Eintracht Frankfurt v Borussia Monchengladbach (7.30pm)
Sunday, May 17
Cologne v Mainz (4.30pm),
Union Berlin v Bayern Munich (7pm)
Monday, May 18
Werder Bremen v Bayer Leverkusen (9.30pm)
'Worse than a prison sentence'
Marie Byrne, a counsellor who volunteers at the UAE government's mental health crisis helpline, said the ordeal the crew had been through would take time to overcome.
“It was worse than a prison sentence, where at least someone can deal with a set amount of time incarcerated," she said.
“They were living in perpetual mystery as to how their futures would pan out, and what that would be.
“Because of coronavirus, the world is very different now to the one they left, that will also have an impact.
“It will not fully register until they are on dry land. Some have not seen their young children grow up while others will have to rebuild relationships.
“It will be a challenge mentally, and to find other work to support their families as they have been out of circulation for so long. Hopefully they will get the care they need when they get home.”
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
UAE currency: the story behind the money in your pockets
Heavily-sugared soft drinks slip through the tax net
Some popular drinks with high levels of sugar and caffeine have slipped through the fizz drink tax loophole, as they are not carbonated or classed as an energy drink.
Arizona Iced Tea with lemon is one of those beverages, with one 240 millilitre serving offering up 23 grams of sugar - about six teaspoons.
A 680ml can of Arizona Iced Tea costs just Dh6.
Most sports drinks sold in supermarkets were found to contain, on average, five teaspoons of sugar in a 500ml bottle.
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BEACH SOCCER WORLD CUP
Group A
Paraguay
Japan
Switzerland
USA
Group B
Uruguay
Mexico
Italy
Tahiti
Group C
Belarus
UAE
Senegal
Russia
Group D
Brazil
Oman
Portugal
Nigeria
