ENOC expects $735m loss on fuel price subsidies

Dubai's state-owned refiner and retailer says situation is 'not sustainable or viable'
ENOC expects $735m loss on fuel price subsidies
By Andy Sambidge
Sat 15 Oct 2011 02:19 PM

Emirates National Oil Company (ENOC), Dubai’s state-owned refiner and retailer, said on Saturday it expects a loss of AED2.7bn ($735m) this year.

It blamed the loss on the gap between international fuel prices, which it said were at their highest since 2008, and local retail rates that are set by the state.

"The cost of providing subsidised fuel to our customers is expected to lead to a loss of AED2.7bn for the company this year. This also has a serious impact on our ability to expand our retail network to meet the growing demand," the company said in a statement.

The company said the situation was “not sustainable or viable,” adding: “ENOC looks forward to the support of the concerned authorities in addressing the concern.”

ENOC said the substantial rise in the price of fuel in the international markets has put a "severe burden on ENOC and EPPCO".

It added that very few stations had been added in Dubai recently and a number of stations had to be closed to undertake infrastructure development work.

During the summer, the UAE faced a fuel shortage, which spread from the northern emirates to Dubai.

The shortfall, which the company blamed on filling station upgrades, was likely a reflection of the gap between fuel prices and the heavily subsidised cost at the pump, analysts said.

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