ENOC reacts to surging cost of oil and diesel

Prices have broken through the $173 per barrel level, for low sulphur diesel - a rise of 21% over the month of May - and $132 for crude oil, according to a spokesperson from Emirates National Oil Company (ENOC), the Dubai Government-owned diversified Energy Group.

The increase is the result of the growing pressure from rapid international price hikes in both diesel, because of refining, shipping and additive costs and crude oil, which have left the oil company with no alternative.

'We procure product from all of the GCC national refineries, at the international price and although we continually work hard to off set the negative margin incurred on fuel sales, such exceptional market forces leave us no option but to try to recoup a proportion of these losses. Equally, we would consider a price reduction to correlate with any lowering of international prices in the future,' explained a spokesperson for ENOC.

'ENOC/EPPCO endeavour to minimise the level of price increases passed on to the consumer, and to maintain fuel prices at amongst the lowest in the developed world. While we are operating in difficult times, as a government owned business, we are a people-oriented service and are committed to supporting the economic infra structure of Dubai, by providing a vital service to the transport sector and to residents.

'In spite of incremental fuel price increases over the last two months, we are buying at continually higher prices and as each shipment cost grows, we are still incurring losses with each gallon sold,' said the spokesperson.

'There has been a global shift in the oil market's underlying structure, fuelled by an exponential growth in demand, notably from China and India and other emerging markets.

This is concurrent with a potential for demand to outstrip supply with some theorising that the oil-producing nations may not be able to keep up with such unprecedented demand over the next ten years,' he concluded.