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          Egypt’s agriculture minister stresses importance of boosting intra-regional trade cooperation among African states

          Egypt’s agriculture minister stresses importance of boosting intra-regional trade cooperation among African states

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          Azerbaijan, Iraq discuss prospects of relations

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            Egypt’s Trade minister, Hungarian ambassador discuss economic relations

            Turkey eyes $5bn bilateral trade with Qatar

            Turkey eyes $5bn bilateral trade with Qatar

            Iraq set to award new Faw Port deals

            Iraq set to award new Faw Port deals

            Deal signed to set-up first factory in Qatar to assemble electric vehicles

            Deal signed to set-up first factory in Qatar to assemble electric vehicles

            Railway line to be built between Mosul, Turkey: governor of Nineveh

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            Foundation stone laid for new 700-bed hospital is Salalah, Oman

            Foundation stone laid for new 700-bed hospital is Salalah, Oman

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            Iraq set to award new Faw Port deals

            Egypt implements 164 service and development projects at LE4.8 billion in North Sinai

            Egypt implements 164 service and development projects at LE4.8 billion in North Sinai

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            Miral’s premier Abu Dhabi waterfront project work on track

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            Aecom wins Neom utilities infrastructure design contract

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              Investments in renewables in Egypt reach LE6 bn: Official

              Egypt signs 8 gas exploration contracts worth $934mn over 15 months

              Egypt signs 8 gas exploration contracts worth $934mn over 15 months

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              JGC lands $3.7bn Iraq refinery upgradation project deal

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              Tadweer opens phase 2 of solar power plant at Al Dhafra

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              France to help Iraq generate electricity, will invest in education, science: Macron

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              Acwa Power inks finance deals for 900MW Dubai solar park

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                Egyptian COVID-19 drug to be on market in two weeks: Health Ministry

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                UAE sends medical aid to Iraq to fight COVID-19

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                UAE launches phase III trial of inactivated Covid vaccine

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                COVID-19 vaccine could be available by autumn: Oxford University

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                Qatar has ‘solid’ line-up of infrastructure, hospitality projects to prepare for large influx of visitors in 2022: OBG

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                Saudi to be among world’s big leisure tourism hubs by 2030

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                Qatar’s hospitality sector peaks despite turbulent 2020

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                Accor inks deal to manage first Swissôtel-branded hotel and residential project in Qatar

                Staycations to stimulate Qatar’s hospitality sector

                Staycations to stimulate Qatar’s hospitality sector

                Quarantine rule to give a boost to Qatar’s hospitality industry in Q3: CWQ report

                Quarantine rule to give a boost to Qatar’s hospitality industry in Q3: CWQ report

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              Dubai to take fuel subsidy cut in stride

              Oxford Business Group

              September 15, 2015
              in Economy
              0

              On August 1, an increase in petrol charges came into force in Dubai and the rest of the UAE, following the announcement on July 22 by the Ministry of Energy (MoE) that the government is removing the fuel subsidy it has traditionally paid.

              Prices at the pump for special grade fuel rose 24% to Dh2.14 ($0.58) per liter and super grade petrol increased by 22.9% to Dh2.25 ($0.61). However, prices will be reviewed on a monthly basis, taking any changes in global oil rates into consideration.

              Due to fluctuations in market prices, the price of special grade fuel eased to Dh1.96 ($0.53) at the end of August, while diesel rates fell by 29% to Dh2.05 ($0.56) per liter before dropping a further 9% one month later to Dh1.86 ($0.51).

              Industry windfall
              Lower diesel prices are expected to boost growth in Dubai, where fuel constitutes 40% of industrial costs, as well as bring benefits to the transport sector, which the IMF expects will be a key growth driver for the emirate this year and next.

              The transport, communications and storage sector accounted for 14.8% of Dubai’s GDP in 2013, valued at around Dh48.4bn ($13.2bn). The sector is growing at a robust rate of 5.6%, and its track record is largely attributable to government efforts to cement the emirate as a multi-modal transport hub.

              Although much of the commercial transport sector operates on cheaper diesel, the rise in petrol prices could have an impact on consumer choices. The new policies may also bolster Dubai’s efforts to expand infrastructure for battery-run cars and introduce new incentives to encourage drivers to switch to more environmentally friendly vehicles.

              Dubai’s thriving automotive sector is seen as a litmus test for new technology in the region, with the emirate one of the first to introduce technology such as hybrid vehicles. Until now, part of the attraction of conventional cars was low fuel costs, but that era may now be drawing to a close.

              “Fuel prices are still relatively cheap, which doesn’t provide such a great incentive for hybrid or green energy at the moment, but if prices keep going up these models might become an alternative for car owners,” Karl-Johan Sandesjo, general manager of Gargash Enterprises, the authorized Mercedes-Benz distributor in Dubai, told OBG. Even if green technology remains a ways off, a drop in diesel prices could help move purchases away from conventional petrol options.

              Rationalization to spur growth
              Other beneficiaries of the new fuel policy include Dubai-based Emirates National Oil Company (ENOC), which announced plans in August to expand its network of filling stations beyond its home market, offering it the opportunity to generate earnings without a state-imposed cap.

              The scrapping of fuel subsidies and a move towards open-market conditions are incentives to broaden the company’s base, ENOC CEO Saif Al Falasi said on the day the new pricing policy came into force.

              “With the MoE having deregulated oil prices, this decision will now enable us to move forward with our expansion plans and continue investing in technologies that enhance customer service and experience,” he said. “We will also meet the growing public demand for more service stations in line with the expected population growth in the UAE over the next five years.”

              Balancing act
              While the lifting of subsidies should help reduce the strain on state resources, experts have warned the rising cost of living in Dubai − which has some of the highest rental rates in the world − could make the emirate a less appealing place for foreigners to work or to start a business.

              Economic forecasts suggest that the removal of the fuel subsidy will add 1-1.5% to inflation in Dubai and the rest of the UAE, as higher costs are passed down the production and distribution chain. While lower diesel prices will reduce logistics costs and potentially bolster the free zones in Dubai that rely on shipping and exports, any savings may be offset by rises in other charges, such as higher taxi fees and operating costs for personal and small commercial vehicles.

              Nonetheless, the fuel subsidy reforms have been widely welcomed, with the IMF long advocating that oil-producing nations need to scale back support for energy costs. Suhail Al Mazroui, minister of energy, said the new price scheme would “improve the UAE’s competitiveness while positioning the nation on international indices”.

              With approximately $7bn spent on petroleum subsidies per year in the UAE, according to the IMF, the savings will help strengthen state finances, as international oil prices continue to weigh on growth.
              Oxford Business Group
              15 September

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