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19 March 2024

How residents plan to deal with petrol hike

Published
By Vicky Kapur

As the clock struck 12am last night, the UAE’s fuel regime graduated from a subsidies era to one of deregulation where residents will now pay a market-determined price for the fuel we consume.

As of today, 95 octane petrol (special grade) across fuel stations in the UAE costs Dh2.14 per litre, up 24.4 per cent from the Dh1.72 per litre that we paid until last night.

The super grade of petrol (98 octane) now costs Dh2.25/l, up 22.9 per cent from Dh1.83/l that residents paid until July 31, 2015.

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

Dr Matar Al Nyadi, Undersecretary for the Ministry of Energy and chairman of the UAE’s Fuel Price Committee, confirmed during the announcement that the simultaneous decline in diesel prices from Dh2.90 per litre to Dh2.05/l will act as a stimulating factor for the economy and reduce commodity prices as diesel is the fuel for trucks used to transport commodities from ports and within the country.

He added: “The Ministry has coordinated with all relevant entities in the country including the Ministry of Economy and the Supreme Committee for Consumer Protection to monitor the movement of prices and safeguard the rights of consumers.

"This will ensure that people across the country benefit from lower diesel prices, which would mean lower operating costs for a wide number of vital sectors such as industry, shipping and cargo.”

However, private cars in the country largely run on petrol. The ministry maintains that the announced increase will not create an additional burden on car owners with limited incomes.

As the price-hike takes effect, however, UAE residents have made their own plans to minimise its impact on their wallets.

More than half (56 per cent) of residents who participated in an Emirates 24|7 poll say they will change their driving habits as a result of the deregulated price.

While more than a quarter (26 per cent) say they will switch to a more fuel-efficient car, another 30 per cent maintain that they will drive less and car-pool where possible.

“I have been thinking of replacing my car, a 2008 model Hummer, which doesn’t give me nearly as much mileage as a newer, more fuel-efficient car would give,” says David B., a Dubai resident who regularly commutes to Abu Dhabi for work.

“My wife too drives a four-wheel-drive, and I think one 4WD is enough for our family of five,” he quips. “So I might actually go for a smaller car this time.”

This is in line with the reaction that the Ministry of Energy is hoping to elicit with the hike. The ministry said during the announcement that the deregulated, market-linked petrol price “will promote rationalised consumption and incentivise people to choose most fuel-efficient cars while curbing the increase in the number of cars on the country’s roads in the future”.

Speaking on the environmental benefits of the decision, Suhail Al Mazroui, Minister of Energy, said that deregulating fuel prices will help decrease fuel consumption and preserve natural resources for future generations.

He noted that it will also encourage individuals to adopt fuel-efficient vehicles, including the use of electric and hybrid cars, and added that the decision will encourage the use of public transport.

Of the poll respondents, 15 per cent said they would start taking public transport, which should help ease the rush on the country’s roads.

“I’ve done the math,” says Kamran, who lives in Al Nahda and works in Business Bay. “I’ll have to jostle my way into a metro during office hours but not only will I save about Dh1,200 in fuel cost and the car’s EMI and maintenance, but probably also save a few minutes in my daily commute.”

According to the minister, the transport sector was responsible for 22 per cent of the total greenhouse emissions in the UAE in 2013 amounting to 44.6 million tonnes of carbon dioxide.

Given this stark reality, he added that increasing the use of public transport and reducing dependence on individual vehicle usage will have a positive impact in lowering carbon emissions.

In this regard, the minister pointed out that the UAE has an advanced public transport system with options that are environmentally friendly such as taxis that work on natural gas.

Nevertheless, a significant proportion of the poll respondents (29 per cent) maintain that they will not be impacted by the deregulation of fuel prices in the UAE.

“I take the Metro to work and back,” said Suneeta, who lives in Dubai’s Greens area and works in Karama. “Both my house and office are conveniently located near the metro stations, so am lucky in that respect,” she notes.