By ANTHONY DiPAOLA
The United Arab Emirates, OPECs fifth-largest oil
producer, needs to roll back subsidies on fuel and power to
help limit its energy consumption and imports of natural gas,
the countrys energy minister said.
You will never have a strong economy if you are
subsidizing, Suhail Al Mazrouei told reporters in his
office in Abu Dhabi. In consumption of electricity, we
are two to three times the global average, and we are not
happy about that level. The government has yet to
determine changes in prices and subsidy levels, he said.
Middle Eastern oil producers including the UAE and Saudi
Arabia are consuming as much as 10% more electricity each
year, governments in the region have said, as they diversify
into power-dependent industries such as petrochemicals
and steelmaking and
as household demand rises.
The amount of crude Saudi Arabia has available to export will
fall to unacceptably low levels over the next two
decades if the country doesnt pare its fuel use,
state-run Saudi Arabian Oil Co. said in May.
Possible cuts in subsidies, which Persian Gulf monarchies use
to transfer oil wealth to their citizens, are a politically
sensitive issue after domestic discontent led to the
overturning of governments in Tunisia, Libya and Egypt since
2011. The UAE would retain some subsidies for its citizens,
who comprise about a 10th of its population, Al Mazrouei
The UAE, one of 12 members of the Organization of Petroleum
Exporting Countries, is forming a strategy to moderate energy
consumption and diversify supply sources by 2030, he said. By
then, the countrys domestic needs will be met 70% by
gas, 25% by nuclear power and the rest by renewables such as
solar power, Al Mazrouei said. The nation burns gas to
generate most of its electricity, importing much of the fuel
by pipeline from neighboring Qatar.
Dubai, the UAEs second-largest emirate, has imported
liquefied natural gas since 2010. Two companies owned by Abu
Dhabi, the countys largest sheikhdom, plan to operate a
terminal for receiving LNG in the emirate of Fujairah by
Any saving we do we will reduce the level of future
importation that we need, Al Mazrouei said. The start
of the LNG facility would be a logical time for the UAE to
change its policy
of selling power below
cost, he said.
The cost of generating solar power will have to be
competitive with price of imported LNG, he said.