- Advertisement -
Tuesday, November 26, 2024
Home News Fleet Gulf nations should ‘rethink fuel subsidies’ – Qatar think tank

Gulf nations should ‘rethink fuel subsidies’ – Qatar think tank

GCC states should “rethink generous subsidies” and tackle soaring domestic energy consumption, according to a report by a Qatar-based think tank.

The Abdullah Bin Hamad Al Attiyah Foundation for Energy and Sustainable Development urges Gulf countries to curb domestic energy consumption or risk losing out on export revenues that account for up to 90% of government revenues.

“Energy is sold more cheaply in the Gulf than almost anywhere else in the world. Prices that appeared munificent in the 1970s have remained constant – or even been reduced, in a few cases – despite the eroding effects of income and inflation,” the foundation said in a statement.

While in 1973, oil consumption in the region was less than 1% of global demand, forty years later, the Gulf nations consume 5% of the world’s oil with just 0.5% of the world’s population, the report said. Moreover, the GCC’s primary energy consumption in the past decade has grown more than twice as fast as the world average of 2.5% per year.

These factors mean the region will have to take steps with regards to subsidies, said H.E. Al Attiyah, Qatar’s former Minister of Energy & Industry and Deputy Prime Minister.

“The Gulf countries have to rethink the generous subsidies they have; they cannot afford them anymore and will have to look at alternatives,” Al Attiyah said.

“They have to reduce subsidies and prepare people to accept that change. Young, educated people will be instrumental to that change.”

One of the main arguments for subsidy reform is that the public funds and national resources being used to underwrite subsidies could be used to “generate greater social benefit,” the statement said.

“In this sense reformed prices that make energy products more expensive would raise additional revenues for the state, while inducing consumers to adopt habits and technologies that increase conservation and benefit the environment. This, in turn, would reduce state spending and preserve resources for export.”

The UAE made the move to scrap subsidies and deregulate fuel prices in July. The decision has been praised by vehicle manufacturers as a step in the right direction towards encouraging consumers and business to purchase more fuel-efficient vehicles.

“The [UAE] has made this strategic decision to remove fuel subsidies to protect the environment, preserve natural resources and encourage people across the country to consider using more fuel efficient vehicles such as hybrids,” said Samir Cherfan, managing director at Nissan Middle East.

“We do not expect that the changes in fuel prices will negatively impact the sales of any of our models in the UAE.”

Meanwhile, Franz Freiherr von Redwitz, managing director of MAN Truck & Bus Middle East, said that the German manufacturer expects fuel consumption to play a bigger role in the operating costs of its customers in the future. 

“The less subsidies there are on fuel, the higher the fuel costs will be. Thus, a vehicle’s fuel consumption will be evaluated more by customers when it comes to the question of which brand they’re going to purchase,” he told MEConstructionNews.com in a recent interview.

“At the moment, diesel has become cheaper but if the fuel price rises, the selection of an efficient vehicle becomes even more important than it is now.”

- Advertisement -
Jerusha Sequeirahttp://www.meconstructionnews.com
Jerusha Sequeira is a reporter contributing to Big Project ME and Truck & Fleet ME magazines. She writes news and features on topics across the construction, machinery and commercial vehicles industries in the UAE and wider Middle East and contributes to the digital platform daily. She graduated from the American University of Sharjah in 2014 with a BA in Mass Communication/Journalism. Jerusha has previously interned with the local daily Gulf News, and has worked with on-campus publications at AUS.
- Advertisement -

Most Popular

MAN trucks dominates fleet as United Motors & Heavy Equipment lands deal with Emirates Flight Catering

United Motors & Heavy Equipment (UMHE) and Emirates Flight Catering (EKFC) have officially signed a deal aimed at boosting operational efficiency in the aviation...

PlusX Electric advocates for sustainable charging solutions for EVs

Dubai-based PlusX Electric is advocating for the use of ‘more eco-friendly, non-super-fast chargers for electric vehicles (EV)’, stating that there are substantial environmental benefits...

AJEX Logistics Services set to expand with new facility at Bahrain Cargo Village

AJEX Logistics Services (AJEX), a prominent express distribution and shipping solutions provider in the Middle East, has signed a Letter of Intent (LOI) with...

HEAT Show 2024: Action-packed HEAT Show opens in Dammam

The HEAVY EQUIPMENT AND TRUCK (HEAT) SHOW has officially opened its doors at the Dharan Expo, bringing together key players in the heavy equipment...

Related News

HEAT Show 2024: Al-Kifah strikes 100 unit ready mix truck deal

XCMG has continued its impressive week at the HEAT Show with a major deal to supply 100 units to Al Kifah, one of the...

PlusX Electric advocates for sustainable charging solutions for EVs

Dubai-based PlusX Electric is advocating for the use of ‘more eco-friendly, non-super-fast chargers for electric vehicles (EV)’, stating that there are substantial environmental benefits...

AJEX Logistics Services set to expand with new facility at Bahrain Cargo Village

AJEX Logistics Services (AJEX), a prominent express distribution and shipping solutions provider in the Middle East, has signed a Letter of Intent (LOI) with...

HEAT Show 2024: Action-packed HEAT Show opens in Dammam

The HEAVY EQUIPMENT AND TRUCK (HEAT) SHOW has officially opened its doors at the Dharan Expo, bringing together key players in the heavy equipment...

HEAT Show 2024: Tata Motors launches first AMT Truck in Saudi Arabia: Prima 4440.S

Tata Motors has unveiled its first-ever Automated Manual Transmission (AMT) truck, the Prima 4440.S AMT, in Saudi Arabia. Based on the brand’s flagship Prima platform,...

LEAVE A REPLY

Please enter your comment!
Please enter your name here