For the second-month straight, fuel prices have increased across the UAE at an average of 1.94Dhs/Litre. This comes on international speculation of a potential freeze of Opec production causing the increase in oil prices.
The following are the hiked fuel prices announced by the Ministry of Energy for September:
- Unleased Gasoline 98′ at AED 2.01/Litre from AED 1.89/Litre in August
- Unleaded Gasoline 95′ at AED 1.90/Litre from AED 1.78/Litre in August
- Unleaded Gasoline 91′ at AED 1.83/Litre from AED 1.71/Litre in August
- Gas Oil Diesel at AED 2.00/Litre from AED 1.88/Litre in August
[Related: Six Ways You Can Save On Fuel]
Fuel prices have been linked to international crude oil prices for the past 2 years in the UAE.
The removal of the subsidy on petrol and diesel prices was effective in August 2015, as a result of the drop in the price of oil barrels for that year from a $100/barrel to almost $55/barrel. As a result, this caused major losses across all oil producing and exporting countries across the globe. Thus the removal of the subsidy in the UAE was inevitable to cope with the sudden drop in the price.
The fluctuating petrol prices from month to month continue to day in the UAE. The authorities ensure that the removal of the subsidy came to strengthen the country’s finances and reduce greenhouse gas emissions. The cost of the subsidy per person per year was estimated to be $2,378 accounting for 5.6% of the country’s GDP according to the International Energy Agency. As a result, this has been costing the country around 7 billion Dollars per year. This budget has been accordingly redirected to building a stronger economy not dependant on subsidies, while simultaneously encouraging the use of public transport, hybrid and electric cars, thus decreasing the emission of greenhouse gases which the transport sector accounts for 22% of in the UAE.