Abu Dhabi raises LPG prices second month
The UAE is world leading producer of LPG with 9 million metric tonnes of output a year. - Supplied photo
Abu Dhabi - Adnoc Distribution has adjusted LPG cylinder prices by Dh2 for a 25lb cylinder to Dh46 while refilling of 50lb cylinder is expensive by Dh4 to Dh92, reflecting latest trends on international crude oil markets.
In November too, the oil marketing and distribution company had revised by prices by Dh2 and Dh4 for 25lb and 50lb cylinder respectively.
However, a majority of LPG consumers who have obtained Rahal e-cards that allows them to purchase these cylinders on massive state subsidies would continue to purchase it without any increase.
For those who recently obtained Rahal e-Gas cards, Adnoc Distribution offers LPG cylinders at subsidized prices i-e Dh20 for 25lb cylinders and Dh30 for 50lb cylinders, available across Abu Dhabi and the Northern Emirates where the oil marketing company runs a vast network of petrol stations.
Adnoc Distribution sets LPG prices on the 10th of every month after reviewing petroleum prices that are fixed by the UAE ministry of Energy's high powered committee on the 28t of every month.
"The new prices reflect the global surge in the pricing of the product," says Khalid Hadi, vice president of marketing and corporate communications division at Adnoc Distribution.
On December 9, Opec Basket of Crude oil slipped to $34.80 a barrel from $35.30 per barrel a day before. The crude oil prices, which started plummeting from $114 in mid-June last year, have dropped 69.4 per cent in 18-months period.
"The LPG prices closely follow the rise and fall in crude oil prices," said Khalid Al Awadhi, the chief executive officer of Hawk Energy, a Dubai based consultancy.
Al Awadhi termed the recent rises of November and December as normal corrections. "It's not a significant increase," said the expert.
The UAE is world leading producer of LPG with 9 million metric tonnes of output a year, which finds its markets in the high growth economies of China, India, Japan and Korea fueling their economies.
Al Awadhi said the GCC nations of KSA, Kuwait, Qatar and Oman provide generous amount of subsidies on LPG to even commercial and industrial consumers.
However, the UAE only gives subsidy to its residential consumers both the UAE nationals as well as expatriates from the day one, while industries, hotels, restaurants and bakeries have been excluded from this policy and have to pay full price, he said.
The expert said the UAE must do away with subsidies on LPG in line with withdrawal of subsidies on petroleum products, in order to make the economy more efficient and to bridge fiscal deficits.
Hadi said: "Adnoc Distribution is committed to monitoring the markets as well as following up with all relevant stakeholders in the UAE to guarantee fair implementation of the new pricing."