The Energy Consumption Pattern.

Primary energy consumption in the UAE, so far only consisting of oil and natural gas, has risen from about 34.9 million tons per year of oil equivalent (t/yoe) in 1993 to 52.7m t/yoe in 2005. In 2008 it is expected to reach 70m t/yoe.

UAE oil consumption in 2008 is expected to average about 423,500-430,000 b/d, with demand for gasoline in Dubai alone rising by about 15% per annum. This compares with about 325,000 b/d in 2005, 309,300 b/d in 2004, and about 296,000 b/d in 2003. Oil consumption in the 1990s had declined because of an increase in the use of natural gas. UAE oil use in 1993 averaged 335,000 b/d and rose to 349,000 b/d in 1995, to fall to 243,000 b/d in 2000. In 2001 is rose to 273,000 b/d and in 2002 it averaged 284,000 b/d.

Demand for oil products in the seven emirates is met by refineries in Abu Dhabi, Dubai and Fujairah (see DT No. 22). Distribution of oil products is done by companies from Abu Dhabi and Dubai.

Emirates Petroleum Products Co. (EPPCO), a JV of the Dubai government (60%) and Caltex al-Khaleej (40%), is a big distribution venture. Established in 1980, EPPCO entered the fuels retail business in 1988 and ended the monopoly of Emirates General Petroleum Co. (Emarat), a federal entity. But Emarat has since become more aggressive in marketing fuels in the northern emirates - with the exception of Abu Dhabi which has its own fuel retailing firm, ADNOC-FOD, a unit of the state-owned Abu Dhabi National Oil Co. (ADNOC).

ADNOC-FOD has expanded beyond the UAE and the Middle East, marketing lubricants in African and Asian countries as well as in the GCC (see down1AbuDbaseJan1-07).

The Dubai government-owned Emirates National Oil Co. (ENOC) has a 120,000 b/d condensate splitter upgraded to turn sour condensates into premium fuels including unleaded gasoline (see DT No. 22). Gasoline being consumed in the UAE is lead-free.

Diesel prices in Dubai on May 19 hit a record Dh17 per gallon, an increase of Dh1.20 from Dh15.80 a few days earlier. While incremental price increases of diesel have become a normal occurrence, Dubai has seen the largest in years. Platts then said: "Local retailers are losing a lot of money because they're paying international prices and selling at subsidised rates". The local price had risen by 40% since the beginning of 2008, when it was Dh12.15/gallon.

The price of diesel at Dubai filling stations is almost 100% higher than at ADNOC-FOD stations in Abu Dhabi, the UAE capital, and northern emirates, where it is Dh8.6 per gallon. On the eve of the latest price rise in Dubai, long queues formed at ADNOC-FOD stations as Dubai motorists and truck companies rushed to get the cheaper diesel. Abu Dhabi produces its own fuels, while Dubai has to import most of its diesel requirements (see background in down21UAEbaseMay22-06). By May 19, paper WTI at NYMEX had risen close to $128 a barrel with indication that it could hit $150 before end-2008.

Spokesmen for EPPCO, ENOC and Emarat on May 19 said these companies were still making a loss despite the price rise, as this was still below their purchase costs. Experts on May 19 forecast that the price of diesel in Dubai could exceed Dh20/gallon by mid-2008.

The diesel market in Dubai has overtaken that of gasoline, despite a steady rise in the number of vehicles using the latter fuel. Over 92 industries and 60 multi-service companies in Dubai use diesel, apart from the transportation sector.

Together, EPPCO, ENOC, Emarat and ADNOC-FOD have about 500 fuels retail stations in the UAE. EPPCO and ENOC have over 300 stations. Emarat has 15 ones and ADNOC-FOD has 180 stations. Under an agreement with ADNOC, EPPCO, ENOC and Emarat do not have a presence on the Abu Dhabi market where ADNOC-FOD is the exclusive retailer. But ADNOC-FOD has a presence in the northern emirates other than Dubai.