Just in: Petrol prices in the UAE set to go up in April
Yes, the cost of filling up a tank is about to go up, but it’s still far cheaper than it was last summer…
The Ministry of Energy has announced that petrol prices in the UAE will go up next month: the price hike will see Super 98 go up by 10.2 per cent from Dhs1.47 a litre in March to Dhs1.62 in April.
Meanwhile, Special 95 will go up by 11 per cent – rising from Dhs1.36 to Dhs1.51 per litre, E-Plus-91 will jump from Dhs1.29 to Dhs1.41 and Diesel will be sold at Dhs1.56 a litre (the price was Dhs1.40 per litre in March). These prices are still far lower than August last year when the subsidies lifted (and Special 95 was Dhs2.14 a litre).
Prices will go up next month due to the recovery of global oil prices: there was a record drop of oil prices this year, with a barrel costing Dhs404 in June 2014, but only costing Dhs110 a year in January this year. Whereas on Monday, the global benchmark, brent was trading at just over Dhs150 on Monday.
So why is the price of petrol fluctuating month by month? Well, for years the price was subsidised by the government. This shielded consumers in the country from global fluctuations in the cost of petrol, but the subsidies wwere removed on August 1 2015, and UAE consumers now pay rates based on average global prices.
“Well, for one, it will save the UAE a lot of money. The International Monetary Fund has estimated that it could save the UAE $500m in just the rest of 2015, with these savings likely to rise in the years ahead. Removing expensive subsidies also makes the country look good to investors and creditors, who might put money into businesses or extend loans to fund growth. But there’s another important factor too, one where consumers can really make a difference. Subsidised petrol prices tend to encourage wasteful consumption (who cares how much petrol you use when it costs so little?) and contribute to excessive emissions, as people happily drive around in vehicles bigger than they really need. It’s clear the changes in pricing are also intended to encourage what’s been called ‘rationalised’ consumption, as it is hoped consumers will gradually make a change to smaller vehicles and opt to use public transport more often. This all fits with broader government strategies aimed at making the UAE a ‘greener’ country, such as introducing solar power and developing green building regulations.”
THE SPECIAL 95 PRICES OVER THE MONTHS
Dhs2.14 a litre
Dhs1.96 a litre
Dhs1.79 a litre
Dhs1.70 a litre
Dh1.68 a litre
Dhs1.58 a litre
Dhs1.47 a litre
Dhs1.36 a litre
Dhs1.51 per litre