ADNOC to use gain from fuel price deregulation to open 125 new outlets
The distribution arm of the Abu Dhabi–based ADNOC Distribution says it plans to use the gains accrued following the deregulation of fuel prices in the country to open 125 new service stations across the UAE.
ADNOC Distribution, which currently operates 386 service stations, welcomed the government’s move to remove price controls over petrol and diesel, saying it will allow the company to leverage its expansion plans to meet the rising demand for petroleum and allied products by the public, in line with the sustained urban growth the UAE is witnessing across all regions.
“The decision will also, in the long-term, allow us to enhance the quality of products and services and deliver an improved customer experience via our service centres,” the company said in an emailed statement.
A committee appointed by the Ministry of Energy announced new fuel prices for the month of August on Tuesday (28 July), nearly a week after it said the diesel and petrol retail will now be based on average global prices.
With the new pricing policy in place, petrol prices were increased by nearly 24 per cent for the month of August. However, diesel price dropped from AED2.90 to AED2.05, down 29 per cent.
The Ministry of Energy had set up a fuel price committee to review fuel prices against average international levels. The committee would announce on the 28th of each month the fuel price for the next month.
Effective August 1, the price of Octane 98 (Super) petrol would cost AED2.25 per litre and Octane 91 (E-plus) AED2.07 per litre; a litre of unleaded gasoline 95 (Special) will cost AED2.14.
“Given the prevailing global prices, it was a real challenge for ADNOC Distribution to cut down diesel prices that have been reduced by 29 per cent. The decision to reduce diesel prices has been taken in public interest with the aim of supporting the national economy and ensuring its global competitiveness. We are confident that the move will positively impact our economy and will in turn reduce the operational costs across a wide range of pivotal sectors including industries, transportation, shipping among others,” says Abdulla Salem Al Dhaheri, CEO of the company.
Meanwhile, analysts have welcomed the move to remove subsidies saying that it will be in favour of the country’s economy.
The International Monetary Fund projects that, this year, the UAE will post its first fiscal deficit since 2009 and estimates that the country spends $7 billion annually on petroleum subsidies.