UAE raises fuel prices again, widening gap with Gulf peers

Besides the number of coronavirus cases and the temperature, there’s something else also whose intensity has been soaring in the UAE for quite some time now. It’s the fuel prices. During the diurnal functioning and administration of a country, fuel prices do increase, but only by levels which are impervious to most individuals because of inflationary cost pressures. However, of late, attributing to certain anomalies, the prices have increased exponentially. 

The UAE, formerly believed to have relatively lower prices, is now foiled by the copious and erratic surge in fuel prices happening to be a major conundrum for the denizens as they have to adjust their expenses and give a second thought to their road journeys and weekend plans involving sojourns at locations that make for an elegant picturesque. 

A major factor that contributed to UAE possessing a delectable grandeur of exotic vehicles is the comparatively low cost of fuel which has to be shelled out against other countries. However, this austere scenario might transform things as people shy away from purchasing cars which are punitive under rigorous use and acceleration. Moreover, in the UAE, fuel expense is inevitable as a multitude of people regularly travel vast distances clocking kilometres faster than time. 

Since 2015, a committee earmarked for the purpose of setting fuel prices in the UAE on a monthly basis which is paraded by the UAE Ministry of Energy had many stunned when it announced fuel prices that stood at:

E-Plus 91- AED 4.44/litre

Special 95- AED 4.52/litre

Super 98- AED 4.63/litre

Diesel- AED 4.76/litre

Amidst the sombre global scenario, the UAE fuel prices increased fifth time in this year, making the price of petrol dearer than Kuwait by four times. Not only this, its price is twice as much as the average cost contemplated for the GCC region. The reason for the dismal happening could also be contributed to a hike in the price of crude oil which increased by nearly half to over USD 100 per barrel.   

While certainly not a very portentous event, reports elicit that the UAE prices, despite being amongst the highest is lower than the global average. Currently, the most expensive fuel prices are in Hong Kong at AED 10.72 followed by Finland-AED 9.53, Iceland-AED 9.44, Norway-AED 9.22 and Greece-AED 9.13. 

Countries of Iran, Syria, Kuwait, Nigeria and Malaysia feature in the roster of the countries with the least fuel prices which are AED 0.19, AED 1.02, AED 1.23, AED 1.48 and AED 1.67, respectively. 

Since 2015, UAE has removed subsidies on fuel and also possesses great reserves of crude oil and supply. It is despite this fact that the prices have increased in the region. This could be partly owed to the eschewing of incentives which were provided to oil producers prior to 2015 for which, an annual sum of $ 7 billion had to be forked out to keep the UAE prices low or under check. 

Another cause of this would be the grapple between two European nations of Russia and Ukraine which disrupted supplies of oil and led to an unprecedented increment in the cost. 

It might be only after the end of this war and the complete eradication of the Coronavirus that fuel prices in the UAE might decrease significantly if not reinstated wholly to the previous levels.