Dubai diesel prices will fall further

[mehak]

Abu Dhabi: Dubai oil retailers - Emirates National Oil Company (Enoc), Emirates Petroleum Products Company (Eppco) and Emarat - will further slash diesel prices at the pumps by 50 fils a gallon effective September 1, marking their sixth straight cut in prices in a little more than a month, oil company sources told Gulf News yesterday.

"The price of diesel will be cut to Dh16.25 per gallon from Dh16.75 per gallon from Monday," a spokes-man for Enoc and Eppco confirmed the news on behalf of the two companies.

"We want to pass on the benefit of lower fuel prices to our customers," he said.

A spokesman for Emarat was unavailable for comment.

The three Dubai oil retailers buy diesel at international prices and then adjust the local prices, based on the landed cost of the oil product.

The price cuts have been announced by the oil retailers following a downward trend in international crude and oil product prices since mid-July.

When the price cut becomes effective, the price of diesel in Dubai will have come down 18.46 per cent or Dh3 since July 28, when it was selling at a record high of Dh19.25 a gallon. The diesel price gap in Dubai and Abu Dhabi will also further shrink to 88.95 per cent.

International crude oil prices have fallen sharply from a lifetime high of $147.27 a barrel on July 11, as an economic downturn in the US, the world's biggest oil importer, has slowed consumer demand.

There are also fears that the world's second biggest economy, Japan, may be slipping into recession.

As well, the dollar, a currency in which oil trading is mostly done, has been strengthening against the euro, which has contributed to the bearish sentiments that currently prevail on the world oil markets.

On the New York Mercantile Exchange yesterday, crude oil futures for September delivery in the US were hovering well below $118 per barrel in early trade.

Petrol: Retailers suffer losses

While there's tremendous euphoria in Dubai surrounding the recent diesel price cuts, state-set gasoline prices continue to hurt the emirate's oil retailers in a big way. "We are incurring a daily loss of Dh7 million on petrol sales," said a spokesman for Enoc and Eppco. "For every gallon that we sell of petrol, we lose more than Dh7," he said.

Petrol grades sell for Dh6.25 and Dh6.75 per gallon in Dubai now. The fuel's prices have remained unchanged since September 1, 2005.