UAE’s Oil Price Deregulation: New Fuel Prices

Over the years, UAE drivers have enjoyed unusually low petrol prices, but the gas increase in August was bound to happen. This is the first time the UAE government has undertaken such an initiative, after keeping prices lower than the international average for decades. Analysts warn of further increases for a new pricing policy linked to global levels.

As stated in the Gulf News Energy report, the price of Octane 98 (Super) petrol has been fixed at Dh2.25 per litre and Octane 91 (E-plus) at Dh2.07 per litre. In addition, there has been an increase of about 24 per cent in the price of Octane 95 petrol (Special). Petrol prices increased up by 42 fils from Dh1.72 per litre at present to Dh2.14 per litre, while Diesel prices are reduced by 85 fils per litre, from Dh2.90 to Dh2.05 per litre (as much as 29 per cent).

Regardless of the increase for petrol and reduction of diesel, the fact remains that prices are incredibly low by international standards. Increasing prices in UAE, however, have created concerns and, in some cases, have discouraged people from using their cars. UAE residents are now unsure they can afford the cars they are driving, disclosed Gulf News Editorial in a post.

The decision to deregulate fuel prices was under review for some time now, Matar Al Neyadi, Undersecretary of Ministry of Energy, said. The change is in line with the strategic vision of the UAE government in diversifying sources of revenue and its rationalization of subsidies for the good of the economy. To relook at subsidy structure has a long-term economic, social and environmental impact.

Suhail Al Mazroui, Minister of Energy, told Gulf News that “with the new pricing policy that has been ratified by the UAE Cabinet, a fuel price committee has been set up to review fuel prices against average international levels prior to their implementation in the UAE every month.” On the 28th of each month, the committee will announce the upcoming prices for the following month.

Dubai residents interviewed by Gulf News Business (reported via gntv) shared their thoughts on UAE deregulating fuel prices over long-term economic concerns and expressed mixed views on how the increase in prices will affect their living costs.

The UAE government’s decision to deregulate fuel prices from August 1 aims to bolster government finances dented by the downturn in global oil prices in recent time, a top official of the Ministry of Energy told Gulf News. The action was said to be necessary and a smart move by the Ministry of Energy.

Nonetheless, there are those that agree that the new prices for the month of August will serve as a stimulating factor for the UAE economy. Emissions will be reduced with fewer cars on the road, which will be good for both traffic and the environment, and it also encourages use of public transportation, said Matar Al Nyadi, an undersecretary at the Ministry of Energy and chairman of the gasoline and diesel prices committee.

Further info about the UAE Oil and Gas Trends is available by the Ministry of Energy that has assigned a dedicated number (0565467942) and an email ID (fuelprice@moenr.gov.ae) for public inquiries on the new deregulated fuel prices.

To recap:

• Unleaded Gasoline 98: AED2.25 per litre (up 22 percent)

• Unleaded Gasoline 95 AED2.14 per litre (up 24 percent)

• Gasoline E Plus: AED2.07 per litre (up 28 percent)

• Diesel: AED2.05 per litre

UAE’s Oil Price Deregulation: New Fuel Prices

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