Fuel prices for next month have been cut by around 8 per cent across the board, in line with the fall of international benchmark prices in the past month.
The government liberalised fuel price-setting last month in order to remove subsidies and let prices reflect the vagaries of the international oil market, including the economics of refineries.
The Fuel Price Committee, chaired by a Ministry of Energy official and including the chiefs of the two main distribution companies Adnoc and Enoc, said on Thursday that prices taking effect from September 1 will see diesel fall by Dh0.16 to Dh1.89 per litre, a decline of almost 8 per cent on top of the 29 per cent decline in August 29 for Dubai and the Northern Emirates, and 12 per cent for Abu Dhabi.
Petrol prices for September decline as follows: E-plus (Octane 91 petrol) from Dh2.07 to 1.89, a fall of 8.7 per cent; Special (95) from Dh2.14 to Dh1.96, a fall of 8.4 per cent; and Super (Octane 98 petrol) from Dh2.25 to Dh2.07, a decrease of 8 per cent.
The pricing committee has not yet provided details of which benchmarks it follows to set the prices, but the cut for next month reflects the average decline in gasoline and diesel futures prices in New York over the past month.
There might be further good news for motorists in the cards. The decline in forward futures prices on the New York and London exchanges also suggest that there will be further sharp declines in petrol prices through the end of the year.
The meltdown in China’s financial markets, which many analysts expect will put a dampener on its economic growth, has flown through to commodity prices, including oil prices in recent weeks.
Crude oil prices are down about 30 per cent since the beginning of July, while diesel and gasoline prices have fallen about half that much in the same period.
With the end of the peak summer driving season in the northern hemisphere and rising inventories in the large industrialised countries, the futures markets are signalling that petrol is likely to see further sharp price declines over the next few months.
Matar Al Nyadi, Undersecretary at the Ministry of Energy, said that October’s prices will be set on September 28.
“The prices are based on the average global prices for diesel and gasoline with the addition of operating costs and profit margins of the distributing companies,” Mr Al Nyadi said.
The government’s September price change suggests it is following New York and/or London futures prices, which are the most actively traded.
amcauley@thenational.ae
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