Abu Dhabi: The Ministry of Energy has increased fuel prices for January as global oil prices move up due to an agreement between oil-producing countries to cut output from next month to stabilise oil prices.

The new per litre fuel prices for January are: Super 98-Dh1.91, up from Dh1.80 in December; Special 95-Dh1.80, up from Dh1.69; E Plus-91-Dh1.73, up from Dh1.62.

The diesel price has been fixed at Dh1.94 per litre, which is higher than the December price of Dh1.81 per litre.

Fuel prices have gone up as global oil prices recover due to a historic deal between Opec and non-Opec members to reduce their output by about 1.8 million barrels per day from January 1.

On November 30, Opec member countries agreed to reduce their production by 1.2 million barrels per day and non-Opec members by 558,000 barrels per day in order to stabilise oil prices.

Following the agreement, oil prices surged to their highest level since mid-2015 to trade above $57 per barrel. However, there are still doubts whether Opec member countries would comply with the decision.

According to analysts, the two key factors that will determine the course of oil prices next year would be the compliance of the agreement between Opec and non-Opec members on production cuts and how fast US production will increase.

Other key factor would be whether Libya or Nigeria can recover production towards what they are capable of if the security situation improves in the two countries.

“Will the price hit $60 per barrel soon or anytime in 2017? Unlikely to happen soon, all the upside of the cut is already built into market price now so there is only a downside if the cut doesn’t work,” Spencer Welch, director at London based IHS Energy, told Gulf News.

He, however, said if the production cut holds into the second half of 2017 and US production growth is slower than most expected, then oil prices might trade at $60 per barrel later next year.

The global benchmark Brent crude was trading at $56.46 per barrel, up by 0.66 per cent and US crude West Texas Intermediate was trading at $54.17, up by 0.50 per cent on Wednesday at about 4pm UAE time.

Fuel prices are calculated based on the average global prices for diesel and petrol with the addition of operating costs and profit margins of the distributing companies in the UAE.

Fuel prices have been fluctuating ever since the system was introduced by the Ministry of Energy in August last year.

Fuel prices increased for three consecutive months from September to November this year, but fell in December even though global oil prices were trading higher due to the Opec agreement.

The ministry has raised fuel prices again for January as global oil prices edge up. The new fuel prices will come into effect from January 1.