ENOC will have to cover a shortfall of $735million in 2011 between the cost of buying fuel on the international market and subsidised retail prices at the pump.
Recent increases in prices are thought to be the cause of shortages at competitor Emarat’s stations, which recently re-finance its $544million debt.
ENOC says that it posted positive results in 2010 but is expecting the price of buying fuel on global markets to remain high, and the cost of covering the difference with subisdised fuel to increase by $326million from $408million in 2010.
“As per the Annual Report, during 2010 and the first quarter of 2011, ENOC recorded positive results and achieved most of its business objectivesl,” the company said in a statement.
“However, due to the rise in price of fuel in the international markets, the company had to internally meet the cost of providing fuel at subsidised rates in the local market, valued at AED1.5billion during 2010.
“It is expected that during full year 2011, ENOC will have to meet an additional AED2.7billion internally to cover the fuel subsidies offered locally. This arises from the difference in the increasing price of petrol sourced from international markets and ENOC’s fixed sale price at its stations.”
