Saudi Arabia has the cheapest petrol prices in the Gulf region but is behind Venezuela in a global list of the lowest fuel costs, according to a new report.
Home to nearly a fifth of the world’s oil reserves, Saudi Arabia is the largest exporter of petroleum and a major player on the global energy stage. With 90 percent of its earnings coming from oil, it is hardly surprising that citizens only pay an average of around $0.127 per litre at the petrol pumps.
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The list of the world’s cheapest petrol prices was compiled by British car insurance provider Staveley Head, with Venezuela taking the top spot, where prices only cost an average of $0.047 per litre.
With President Hugo Chavez keeping prices low, petrol is cheaper than bottled water in some parts of the South American country.
While four Gulf States are listed amongst the rankings, the UAE was notably absent. The news comes as Dubai-owned oil firm Enoc Group has been plagued by fuel shortages this year, with petrol pumps this summer forced to cease or ration resources.
At one point, the Abu Dhabi National Oil Company (Adnoc) was ordered to “help solve” the fuel shortage in Sharjah after the UAE suffered its third shortage in less than a year.
Analysts said the problem lies in government subsidies, which look increasingly unsustainable as soaring oil prices drive up the cost of supplying fuel to customers at a cheaper, fixed price.
Enoc and rival state-owned retailer Emarat have suffered because they buy fuel at market prices and sell it at government-set rates. Enoc said in May it would have to meet an additional AED2.7bn ($735.3m) in 2011 to cover the cost of providing subsidised fuel.
Three of the UAE's four fuel retailers - Enoc, Eppco and federally-owned Emarat - have been making losses for years.
The Staveley Head rankings found the Norway was the most expensive country for petrol, costing $2.6 per litre.