UAE fuel prices out today: What to expect at the pump in September

Dubai: UAE motorists will find out September petrol and diesel prices today, with the latest oil-market moves pointing to a finely balanced outlook after Brent crude ended August's final full trading week sharply lower.

Brent settled at $89.31 a barrel on Friday, losing more than 5% over the week. The decline followed speculation over progress towards an agreement on shipping through the Strait of Hormuz, although oil flows through the strategic waterway remain inconsistent.

The late-month retreat strengthens the possibility of some relief at the pump. But the broader August picture makes a large reduction less certain: Brent's average closing price during much of August was around $87.70, compared with about $83.46 in July, according to market estimates.

That means a modest reduction or broadly stable prices appears more plausible than a steep cut, although the UAE Fuel Price Committee's eventual rates cannot be reliably predicted from crude prices alone.

Where fuel prices stand now

UAE motorists currently pay Dh3.60 per litre for Super 98, Dh3.49 for Special 95, Dh3.41 for E-Plus 91 and Dh3.80 for diesel in August. The rates reflected adjustments in global energy markets during the preceding period.

A typical 60-litre car using Special 95 currently costs Dh209.40 to fill from empty, while an 80-litre vehicle costs Dh279.20.

If September prices were to fall by 10 fils per litre, those fill-ups would become Dh203.40 and Dh271.20 respectively — savings of Dh6 and Dh8 per tank. A 20-fils reduction would save Dh12 on a 60-litre fill and Dh16 on an 80-litre fill.

Those calculations illustrate what different price movements would mean for motorists; they are not forecasts of the official September rates.

Cheaper Brent = cheaper petrol?

The UAE has followed a market-linked fuel pricing policy since August 2015, with the Fuel Price Committee reviewing prices against average international levels every month. The mechanism was introduced to align domestic fuel prices with global markets while supporting economic competitiveness and efficient energy use.

Crucially, UAE pump prices do not simply track the latest Brent quotation. The pricing mechanism uses international refined-product benchmarks for petrol and diesel over preceding weeks, with operating and transportation costs also factored into retail prices. This creates a lag between movements in crude markets and what motorists ultimately pay at the pump. That distinction is particularly important this month.

What August oil prices reveal

Oil started August considerably lower than where it finished.

Brent closed at $83.77 on August 3, fell below $80 during the first week and then rallied strongly as geopolitical concerns returned. By August 21, it had climbed to around $94.39 before retreating during the final week.

Friday's $89.31 settlement therefore represents a decline of more than 5% in a week, but it remains about 6.6% above the $83.77 close at the beginning of August.

This helps explain why September's fuel-price calculation is more complicated than simply looking at Brent's latest decline. The late-August fall is favourable for the outlook, but much of the month was spent at higher levels than July.

What changed in final week?

The biggest change has been the rapid unwinding of part of oil's geopolitical risk premium.

Brent fell more than 5% during the final full trading week as markets weighed reports that progress could be made towards reopening the Strait of Hormuz. The waterway normally handles about 20% of global oil flows, making developments there particularly important for international energy prices.

Shipping conditions have shown some improvement, although tanker movements remain below normal levels and the situation remains uncertain.

At the same time, global refined-product markets remain relatively firm, another reason why the fall in crude cannot automatically be translated into an equivalent reduction in UAE petrol prices.

How September prices look

Based on the latest market trends, a modest reduction now appears somewhat more likely than it did earlier in August, when oil was climbing rapidly towards the mid-$90s.

A reasonable scenario would be for petrol prices to remain broadly stable or decline modestly. For illustration, a 5-15 fils-per-litre reduction would put Super 98 somewhere around Dh3.45-Dh3.55, Special 95 around Dh3.34-Dh3.44 and E-Plus 91 around Dh3.26-Dh3.36.

These ranges should not be treated as predictions. The Fuel Price Committee's underlying refined-product benchmarks and full pricing calculation are not publicly available in sufficient detail to derive tomorrow's rates precisely.

A large reduction appears less easy to justify from crude prices alone because Brent traded above July levels for significant parts of August.

Can petrol go back to Dh3?

That would require a substantially larger adjustment than the modest monthly movements currently suggested by international markets.

At August's Dh3.49, Special 95 would need to fall 49 fils, or about 14%, to reach Dh3 per litre. Super 98 would need to decline 60 fils, or nearly 17%, from Dh3.60.

There is no specific Brent price that automatically produces Dh3 petrol. UAE retail rates depend on international refined-product benchmarks and monthly averages rather than a fixed crude-to-pump-price formula.

A sustained period of lower crude and refined-product prices would therefore be more important than Brent briefly falling below any particular level.

What to expect today

The strongest signal going into today's announcement is that international oil prices have lost momentum late in August, improving the backdrop for UAE fuel prices after the increases introduced for August.

Yet the month's higher average oil prices and continued strength in refined-product markets argue against assuming that Friday's sharp weekly decline will translate directly into an equally large reduction at UAE pumps.

That leaves broadly stable to modestly lower prices as the most defensible expectation for September, with the balance having shifted somewhat towards a small reduction following Brent's late-August retreat.

Whatever today's revision brings, it will continue to reflect the UAE's established market-linked pricing mechanism, under which sustained movements in international energy markets feed through to local petrol and diesel prices over time.