Lowering petrol prices would not be a wise move for the UAE. Photo: Fatima Al Marzooqi /The National
Lowering petrol prices would not be a wise move for the UAE. Photo: Fatima Al Marzooqi /The National

Lowering fuel prices would harm economy



Suggestions by Federal National Council members that the retail price of petrol be lowered have missed the point that cheaper fuel would have a negative impact on the country's economy. As The National reported yesterday, FNC member Hamad Al Rahoomi said that the 60 per cent drop in crude oil prices worldwide should be reflected in the domestic price of petrol, which is currently the highest among the GCC states.

The recommendation looks at the issue from a consumer perspective. Every driver wants cheaper petrol and, at first glance, it would make sense for us all to benefit from the global drop in oil prices. (Despite the fact that the price is already below international market rates.) But we must look at the big picture from a national standpoint.

The economy remains dependent on oil exports as a major source of income. Despite myriad efforts to diversify energy sources, the government still uses huge quantities of fossil fuels to desalinate water and generate electricity. Heavy subsidies also create an environment where conservation of energy resources is not a pressing issue. Our national priority must be to export as much of our fossil fuels as possible – after all, there is an opportunity cost to using subsidised fuel, it means we do not reap the financial rewards of selling that fuel abroad.

While we may pay more than the average price for petrol among GCC states – with a price closer to the current rate in the United States – pump prices still remain among the cheapest in the developed world. Consumers in the UAE pay less than half of the global average price for a litre of petrol. Put simply, lowering petrol prices would increase the level of consumption,the opposite of what the government is trying to achieve.

The only logical thing to do now with crude oil prices falling, as we argued on these pages before, is to reduce fuel subsidies and strengthen oil conservation efforts to ensure that oil is available in the future. The current low oil prices provide the UAE with the opportunity to re-evaluate its fuel subsidy policy – to either reduce government subsidies or remove them completely – because the effect of such a move will hardly be felt in the current circumstances. It's important to think about the interests of the country, not individual motorists' pockets.

Sly Cooper and the Thievius Raccoonus

Developer: Sucker Punch Productions
Publisher: Sony Computer Entertainment
Console: PlayStation 2 to 5
Rating: 5/5

The specs

Engine: 4.0-litre flat 6-cylinder
Transmission: 7-speed PDK
Power: 500hp
Torque: 450Nm
Price: Dh530,300 as tested
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ARGYLLE

Director: Matthew Vaughn

Starring: Bryce Dallas Howard, Sam Rockwell, John Cena

Rating: 3/5

The specs

Engine: 4-cylinder 2.0L TSI
Transmission: Dual clutch 7-speed
Power: 320HP / 235kW
Torque: 400Nm
Price: from $49,709
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Email sent to Uber team from chief executive Dara Khosrowshahi

From: Dara

To: Team@

Date: March 25, 2019 at 11:45pm PT

Subj: Accelerating in the Middle East

Five years ago, Uber launched in the Middle East. It was the start of an incredible journey, with millions of riders and drivers finding new ways to move and work in a dynamic region that’s become so important to Uber. Now Pakistan is one of our fastest-growing markets in the world, women are driving with Uber across Saudi Arabia, and we chose Cairo to launch our first Uber Bus product late last year.

Today we are taking the next step in this journey—well, it’s more like a leap, and a big one: in a few minutes, we’ll announce that we’ve agreed to acquire Careem. Importantly, we intend to operate Careem independently, under the leadership of co-founder and current CEO Mudassir Sheikha. I’ve gotten to know both co-founders, Mudassir and Magnus Olsson, and what they have built is truly extraordinary. They are first-class entrepreneurs who share our platform vision and, like us, have launched a wide range of products—from digital payments to food delivery—to serve consumers.

I expect many of you will ask how we arrived at this structure, meaning allowing Careem to maintain an independent brand and operate separately. After careful consideration, we decided that this framework has the advantage of letting us build new products and try new ideas across not one, but two, strong brands, with strong operators within each. Over time, by integrating parts of our networks, we can operate more efficiently, achieve even lower wait times, expand new products like high-capacity vehicles and payments, and quicken the already remarkable pace of innovation in the region.

This acquisition is subject to regulatory approval in various countries, which we don’t expect before Q1 2020. Until then, nothing changes. And since both companies will continue to largely operate separately after the acquisition, very little will change in either teams’ day-to-day operations post-close. Today’s news is a testament to the incredible business our team has worked so hard to build.

It’s a great day for the Middle East, for the region’s thriving tech sector, for Careem, and for Uber.

Uber on,

Dara

The specs

Engine: 1.8-litre 4-cyl turbo
Power: 190hp at 5,200rpm
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Transmission: Seven-speed dual-clutch auto
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PROFILE OF INVYGO

Started: 2018

Founders: Eslam Hussein and Pulkit Ganjoo

Based: Dubai

Sector: Transport

Size: 9 employees

Investment: $1,275,000

Investors: Class 5 Global, Equitrust, Gulf Islamic Investments, Kairos K50 and William Zeqiri