Aluminium Bahrain's profits last year were down by more than half, as revealed in the results announced last week. Contributing to Alba's pain was some cautious surgery - a 50 per cent rise in gas prices to US$2.25 per million British thermal units. By comparison, American consumers pay $3.15, British $10.30 and Japanese $17.30.
Economists generally agree the Middle East's low gas prices are a bad thing - Saudi Arabia's, at $0.70, are far below even Bahrain's. Cheap, subsidised fuel encourages wasteful consumption and emissions of greenhouse gases, and blocks renewable energy. Underpricing leads to shortages - new, more expensive gas cannot be produced commercially, while demand escalates uncontrollably.
As shortages strike, the government has to step in to make arbitrary decisions on allocating the gas - usually so that big, politically connected industries or vocal consumers benefit at the expense of everyone else. The wealthy - the heaviest energy users - gain more than the poor.
And illogical pricing causes perverse outcomes, as Kuwait today imports expensive liquefied natural gas (LNG) from as far afield as Australia or Russia, instead of extracting its own gas at lower cost.
Indeed, Egypt will soon join the UAE as countries that both import and export LNG - a clear case of distorted policy.
Surgery is inevitable, but governments tremble before they make the first incision. They are concerned that raising gas prices may kill industries - aluminium, steel, petrochemicals - on which they relied to create jobs. This threat has been accentuated by cheaper gas in the United States, driven by its shale revolution - which is enticing petrochemical producers to return. Higher Middle East prices may push up electricity tariffs, stoke inflation and fuel discontent among ordinary people.
Given these problems, how should the operation proceed?
The first step is to discuss with the patient clearly what is required: to reach with industry and consumers a consensus on why current gas prices are unsustainable, what the long-term target should be, and what the path is for getting there. In the Arabian Gulf, the target price could be that of imported LNG (very high), or the - probably lower - cost of developing new domestic gas.
Governments also need more basic data and economic research. What are the competing fuels? What price can each group or industry tolerate? How do higher bills affect consumers and the wider economy?
Increases can be phased in steadily and carefully, the impacts carefully monitored. Bahrain, Egypt and Oman have raised their tariffs modestly.
Of course, the earlier reform begins, the less painful it will be - and it has already been delayed too long. At the same time, bills for electricity and water should rise to reflect the utilities' higher costs.
This raises tricky questions. Should existing energy-intensive industries be given time, say 10 years, to adapt? Do information and subsidies for energy-efficient equipment help businesses and households?
How can low-income consumers and other selected groups be protected? (For example, Iran used direct cash transfers to compensate for raising fuel prices.) Should the authorities act to restrain inflation - something they failed to do in Iran - or treat it as a one-off increase?
To allow higher prices to create more supply, governments need to restructure their gas production sectors, attract international investment and expertise, and ensure their state companies understand the urgency of developing new fields.
"If economists could manage to get themselves thought of as humble, competent people on a level with dentists, that would be splendid," said John Maynard Keynes, the great British economist. Practical plans for reform of the Middle East's gas markets do not have to be as painful as pulling teeth.
Robin Mills is the head of consulting at Manaar Energy, and the author of The Myth of the Oil Crisis and Capturing Carbon
UAE currency: the story behind the money in your pockets
Zayed Sustainability Prize
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
All the Money in the World
Director: Ridley Scott
Starring: Charlie Plummer, Mark Wahlberg, Michelle Williams, Christopher Plummer
Four stars
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
LA LIGA FIXTURES
Thursday (All UAE kick-off times)
Sevilla v Real Betis (midnight)
Friday
Granada v Real Betis (9.30pm)
Valencia v Levante (midnight)
Saturday
Espanyol v Alaves (4pm)
Celta Vigo v Villarreal (7pm)
Leganes v Real Valladolid (9.30pm)
Mallorca v Barcelona (midnight)
Sunday
Atletic Bilbao v Atletico Madrid (4pm)
Real Madrid v Eibar (9.30pm)
Real Sociedad v Osasuna (midnight)
UAE currency: the story behind the money in your pockets
MATCH INFO
Sheffield United 3
Fleck 19, Mousset 52, McBurnie 90
Manchester United 3
Williams 72, Greenwood 77, Rashford 79
Film: In Syria
Dir: Philippe Van Leeuw
Starring: Hiam Abbass, Diamand Bo Abboud, Mohsen Abbas and Juliette Navis
Verdict: Four stars
ITU Abu Dhabi World Triathlon
Hili 2: Unesco World Heritage site
The site is part of the Hili archaeological park in Al Ain. Excavations there have proved the existence of the earliest known agricultural communities in modern-day UAE. Some date to the Bronze Age but Hili 2 is an Iron Age site. The Iron Age witnessed the development of the falaj, a network of channels that funnelled water from natural springs in the area. Wells allowed settlements to be established, but falaj meant they could grow and thrive. Unesco, the UN's cultural body, awarded Al Ain's sites - including Hili 2 - world heritage status in 2011. Now the most recent dig at the site has revealed even more about the skilled people that lived and worked there.
The Pope's itinerary
Sunday, February 3, 2019 - Rome to Abu Dhabi
1pm: departure by plane from Rome / Fiumicino to Abu Dhabi
10pm: arrival at Abu Dhabi Presidential Airport
Monday, February 4
12pm: welcome ceremony at the main entrance of the Presidential Palace
12.20pm: visit Abu Dhabi Crown Prince at Presidential Palace
5pm: private meeting with Muslim Council of Elders at Sheikh Zayed Grand Mosque
6.10pm: Inter-religious in the Founder's Memorial
Tuesday, February 5 - Abu Dhabi to Rome
9.15am: private visit to undisclosed cathedral
10.30am: public mass at Zayed Sports City – with a homily by Pope Francis
12.40pm: farewell at Abu Dhabi Presidential Airport
1pm: departure by plane to Rome
5pm: arrival at the Rome / Ciampino International Airport
Killing of Qassem Suleimani
KILLING OF QASSEM SULEIMANI
The essentials
What: Emirates Airline Festival of Literature
When: Friday until March 9
Where: All main sessions are held in the InterContinental Dubai Festival City
Price: Sessions range from free entry to Dh125 tickets, with the exception of special events.
Hot Tip: If waiting for your book to be signed looks like it will be timeconsuming, ask the festival’s bookstore if they have pre-signed copies of the book you’re looking for. They should have a bunch from some of the festival’s biggest guest authors.
Information: www.emirateslitfest.com
More from Neighbourhood Watch:
Manchester City transfers:
OUTS
Pablo Zabaleta, Bacary Sagna, Gael Clichy, Willy Caballero and Jesus Navas (all released)
INS
Ederson (Benfica) £34.7m, Bernardo Silva (Monaco) £43m
ON THEIR WAY OUT?
Joe Hart, Eliaquim Mangala, Samir Nasri, Wilfried Bony, Fabian Delph, Nolito and Kelechi Iheanacho
ON THEIR WAY IN?
Dani Alves (Juventus), Alexis Sanchez (Arsenal)
Zayed Sustainability Prize
Countdown to Zero exhibition will show how disease can be beaten
Countdown to Zero: Defeating Disease, an international multimedia exhibition created by the American Museum of National History in collaboration with The Carter Center, will open in Abu Dhabi a month before Reaching the Last Mile.
Opening on October 15 and running until November 15, the free exhibition opens at The Galleria mall on Al Maryah Island, and has already been seen at the Jimmy Carter Presidential Library and Museum in Atlanta, the American Museum of Natural History in New York, and the London School of Hygiene and Tropical Medicine.
