UAE petrol pumps may go dry!

With the steep rise in international price of oil, the two largest retailers in the oil-rich United Arab Emirates have threatened to shut down their petrol pumps.

As the oil prices hit another peak of $54 a barrel on Tuesday, cash-strapped EPPCO and ENOC said they will close ten petrol stations on Thursday and all their 165 stations by the end of the month.

Ironically, the UAE's proven recoverable oil reserves are currently put at 98.2 billion barrels or 10 per cent of the global crude oil reserves and the country's oil production is over two million barrels a day. Oil and gas accounts for one third of country's gross national production.

However that has not eased the pressure on oil retailers who suffered a loss of more than Dh 450 million (about $120 million) in the last few years, a company official said.

"The company will have no financial sources to buy crude after it suffered a loss of more than Dh450 million in last few years. Banks are no longer ready to grant us loans to

finance our business" he said.

"A business incurring losses of that magnitude is clearly not sustainable in the long term, unless the companies have either access to subsidised products or retail prices are increased by as much as Dh2 per gallon (one gallon is 3.8 litre)," he was quoted as saying by the local media.