UAE petrol, diesel prices slashed

The Fuel Price Committee, chaired by Dr Matar Al Nyadi, Undersecretary for the Ministry of Energy, has announced the revised petrol and diesel prices for the month of September 2015 across all petrol stations in the UAE.

In line with the declining global oil prices, the revised price for the most popular 95 Octane (special grade) in the UAE has been set 8.4 per cent lower than for the current month, making residents happier as this would mean lesser spend at the pump next month.

The new pricing will become effective at midnight September 1, Tuesday, in line with the new system that has been in place for a month now.

“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. The Fuel Price Committee will next meet on September 28 to agree on the prices for the month of October,” said Dr Al Nyadi, Undersecretary, Ministry of Energy.

Since August 1, 2015, the special grade petrol across fuel stations in the UAE has been retailing for Dh2.14 per litre, up 24.4 per cent from Dh1.72 per litre that UAE residents used to pay during the subsidised regime.

From September 1, it will be retailed for Dh1.96 while prices of 98 Octane (super grade) petrol will drop 8 per cent to Dh2.07. 

The price per litre of diesel, on the other hand, will further go down from the current Dh2.05 to Dh1.86 starting September 1, a drop of 9.3 per cent.

A litre of diesel used to retail for over Dh3 until July 31, after which it was brought in line with the lower international prices.

Dr Matar Al Nyadi noted last month that the reduction in diesel prices serve as a stimulating factor for the economy, enhancing the competitiveness of the national economy, reducing the prices of commodities and eventually reflecting positively on the economy.

The announcement was made at the committee’s meeting that was attended by its members including Younis Khouri, Undersecretary for the Ministry of Finance, Abdullah Salem Al Dhaheri, CEO of Adnoc Distribution, and Saif Al Falasi, CEO of Emirates National Oil Company (Enoc).

The Ministry of Energy’s move to deregulate fuel prices came as per a decision issued by the UAE Cabinet based on a study submitted by the ministry.

Dr Matar Al Nyadi said the committee based the new prices on the average global prices for gasoline and diesel during the month of August with the addition of transport, distribution and operating costs – as approved by the Cabinet for distribution companies.

He added that the Fuel Price Committee will monitor the global prices of gasoline and diesel on a daily basis and will announce the prices for the following month on the 28th of each month based on average global prices during that month.

Suhail bin Mohammed Faraj Faris Al Mazrouei, Minister of Energy, noted last month that the cost of gasoline represents 3 to 4 per cent of an average income in the UAE, which is a reasonable percentage compared to international costs.

Consequently, deregulating prices will not have a notable impact on individuals’ costs of living.

Nevertheless, the ministry clarifies in its FAQs that “[a]ny increase or decrease in oil prices globally will cause an increase or decrease in local petrol prices.”

However, the chances of any major fluctuations in the forthcoming years remains slim, with Morgan Stanley forecasting that global oil prices will remain under $70/b until 2017.

This morning, oil markets moved up from six-and-a-half-year lows reached earlier this week.

Brent, the global oil benchmark, was at $44.64 a barrel by 0900 GMT (1pm UAE time), while US crude (WTI) was at $40.10 a barrel.

Last month, on July 28, Brent was at $53.11/b while US crude traded at $47.19/b.

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