Abu Dhabi, UAESunday 26 May 2019

Petrol costs in UAE among lowest in the world ahead of August hike

The decision by the Ministry of Energy comes just weeks after data compiled by Carmudi — an online marketplace for vehicles — looked at petrol prices in countries where it operates around the world and found fuel prices in the Middle East were 'incredibly low'.

ABU DHABI // The UAE has some of the most affordable petrol prices in the world.

The decision by the Ministry of Energy comes just weeks after data compiled by Carmudi – an online marketplace for vehicles – looked at petrol prices in countries where it operates and found fuel prices in the Middle East were “incredibly low”.

In the UAE, the world’s eighth-largest oil producer, the average price per litre of petrol in April, May and June was US$0.47, or about Dh1.72, which is less than a third of the cost in western Europe.

However, the cost of fuel in the UAE is already three times the price of other GCC countries, the study found.

The firm said the price is $0.15 (55 fils) per litre in Saudi Arabia, which is Opec’s largest oil producer, and $0.26 (95 fils) in Qatar, the world’s third-largest oil producer.

The price of premium unleaded petrol in the United States is $3.18 (Dh11.68) a gallon, or 84 cents (Dh3.09) a litre, according to daily fuel gauge report by AAA, the largest auto group in the US.

Dr Matar Al Nyadi, undersecretary of the Ministry of Energy and chairman of the newly formed Gasoline and Diesel Prices Committee, said that petrol prices might initially rise slightly because of the reform, while diesel would fall.

With the government decision, the price of fuel will now reflect price changes in the global market without any government intervention.

Cutting subsidies and letting fuel prices rise could boost UAE state finances, which have been weakened by a plunge of oil export revenues since 2014 due to the fall in global crude prices.

The International Monetary Fund projects the UAE will post its first fiscal deficit since 2009 this year. It estimates the country spends $7 billion (Dh25.7 billion) annually on petroleum subsidies.

The global price of Brent oil is around $56 per barrel, not far from six-year lows. But linking UAE prices to global levels could clear the way for substantial rises in the future, if Brent starts to recover.

jbell@thenational.ae

* additional reporting by Reuters

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