Abu Dhabi National Oil Company (Adnoc) will act to stop the selling-on and smuggling of diesel sold at its stations, pan-Arab newspaper al-Hayat said.

The move was aimed at preventing diesel from its pumps being sold on to other areas within the UAE and smuggled to neighbouring countries.

State-run Adnoc will issue prepaid cards to ensure that customers wold get equal amounts of diesel, the paper said.

Construction sector customers and those purchasing diesel for generators and heavy machinery will need to provide identification papers stating the quantities needed.

The UAE is the world's third largest oil exporter, pumping 2.5 million barrels per day, with petrol consumption around five million litres per day.

But the Opec member lacks sufficient refining capacity in the face of rapidly growing demand from a rising population and has to import nearly 1 million tonnes of gasoline a year.

Governments across the Gulf region have long subsidised prices at the pump in an effort to cut living costs for residents and encourage economic growth regardless of fluctuations on the global energy markets.

The UAE last year began to phase out gasoline subsidies which cost hundreds millions of dollars a year.-Reuters