Petrol price should be cut, says FNC

Members say the fuel price should be slashed to bring it in line with prices in the rest of the GCC.

United Arab Emirates, Abu Dhabi, Feb. 21, 2012:  Federal National Council member Ahmed al Azaabi speaks during today's FNC session with the UAE Minister of Energy Mohammed al Hamili (not pictured) at the FNC building in Khalidiya, Abu Dhabi. (Silvia Razgova/The National)

Ahmed Al Zaabi
Powered by automated translation

ABU DHABI // FNC members yesterday called for the price of petrol to be slashed, to bring it into line with prices in the rest of the GCC.

While drivers in Saudi Arabia pay as little as Dh0.68 for a litre of 95-octane fuel, forecourts in the UAE charge more than double that - Dh1.72 a litre. No other GCC country charges more than Dh1.14.

Members decided at yesterday's FNC session to form a temporary committee to consider the potential consequences of reducing petrol prices, despite protests from the Minister of Energy, Mohamed Al Hamili.

"UAE prices are tied to the global market," the minister said. "Neighbouring countries' prices are different because they subsidise petrol."

Ahmed Al Zaabi (Sharjah) argued that the UAE's oil production, which is greater than some other GCC members, should allow it to sell petrol for less.

"Look at the GCC, in Qatar a litre is Dh1, and in Saudi Arabia around that, and the same in Oman - and it doesn't produce much, less than here," he said.

The minister insisted the UAE was bound by international agreements to tie its prices to the global markets.

He said the Government was already supporting prices, at cost to petrol retailers, who had been losing money since 2003. The four main retailers lost Dh8.5billion in 2011 alone, and this year could lose Dh12bn, he said.

"These petrol companies have been victims of this for a long time. So there is indirect support for people."

Mr Al Zaabi said low-income families were struggling to afford more expensive fuel. "There will be a lot of problems if prices in country stays as they are," he said.

He called for an increase in local production, and for more refineries to be built.

The minister said importing petrol was sometimes cheaper than producing it locally, but Mr Al Zaabi replied: "As a UAE citizen, I should buy from my own country, like other GCC citizens do in their countries. Why are the global prices my problem?"

He suggested the council put a recommendation to the Cabinet that prices should be brought in line with the rest of the GCC.

The Speaker, Mohamed Al Murr (Dubai) said members should bear in mind that Emiratis were a minority in the UAE before making a recommendation that would benefit both Emiratis and expatriates.

Ahmed Al Amash (RAK) suggested bigger subsidies should be given only to UAE nationals - an idea immediately rejected by Salim Al Ameri (Abu Dhabi).

"The recommendation should be for all because in the UAE some expatriates work in the Government, and at the federal level they work for us," he said.

Mr Al Zaabi said cheaper petrol would have wider benefits, reducing the cost of transport and other services. "It is a continuous circle," he said. "We are not looking at a person, local or not, or company - but overall."

Mohamed Al Qubaisi (Abu Dhabi), who sympathised with the minister, suggested a temporary committee could be formed to consider the effect of cheaper petrol, as it was a "sensitive issue".

That proposal secured a majority of the FNC. Six members were elected to the new committee: Mr Al Zaabi, Hamad Al Rahoumi (Dubai), Dr Mona Al Bahar (Dubai), Sultan Al Sammhi (Fujariah), Marwan bin Ghalita (Dubai) and Mr Al Qubaisi (Abu Dhabi).