UAE fuel prices to fall for fifth month in a row in January

New fuel prices announced by the Ministry of Energy as the plunging price of oil sees drivers in the UAE paying less again.

UAE fuel prices are to fall in January for the fifth consecutive month. Christopher Pike / The National

Motorists will once again pay less for petrol and diesel next month.

From January 1, petrol products will be 6 per cent lower compared with this month, while diesel will be 12 per cent cheaper.

This means that Super will cost Dh1.69 a litre compared with Dh1.79 in December, Special will be Dh1.58 compared to Dh1.68, diesel Dh1.61 compared to Dh1.83, and E Plus is to fall to Dh1.51 from Dh1.61.

Since August the price of Super has decreased over 24 per cent, Special has dropped by 26 per cent, E Plus is down 27 per cent and diesel has fallen more than 21 per cent. Four months ago, the price of Brent crude, the global benchmark, was near US$50, but now it has fallen to around $37. Brent has fallen 16 per cent alone since the start of the month.

When the Energy Ministry announced that it would liberalise the pricing of fuel from August, which has led to a reduction in fuel subsidies, fears grew that fuel costs would increase. However, the exact opposite has happened in line with the falling oil prices.

Yet some motorists have not noticed.

Abu Dhabi resident Maddelyn Bal, 25, of the United States, arrived to the UAE on August 1, the day that the new pricing structure was implemented. And while she fills up on Super at least once a week, spending between Dh80-90, she hasn’t noticed the change. “I don’t necessarily see a change,” she said.

While many motorists may overlook the gradual decrease, businesses are certainly noticing.

For Dubai-based Qmega Energy Innovations, an energy solutions provider, transportation costs have noticeably declined. “Transportation costs have definitely come down. While it is a small percentage of our overall cost structure, it is reduced,” said Omer Ghani, chief executive of Qmega. “It’s not down 27 per cent, but definitely a portion of that.”

Matar Al Neyadi, undersecretary of the Energy Ministry, said last week in Abu Dhabi that fuel prices were connected to other market elements such as the time of year – winter versus summer – as well as the price in Brent crude. “So a lot of importance has come in to determine the price of gasoline,” he said.

The feedback in response to the UAE government’s decision to implement a new pricing tool has been positive, according to Mr Neyadi. “I’m sure other countries will look into adopting the same procedure, but when I don’t know,” he said.

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