Abu Dhabi: As global oil prices remained low, there has been a reduction in fuel prices announced by the Ministry of Energy on Thursday.
The UAE fuel prices were announced early during the day before global oil prices surged more than 8% late Thursday.
The Ministry of Energy reduced fuel prices by more than 8 per cent. Special 95 petrol will cost Dh1.96 per litre for September when compared to Dh2.14 for August.
The price of diesel has been fixed at Dh1.86 per litre, down by more than 9 per cent from the August price of Dh2.05 per litre.
The prices are based on the average global prices for diesel and gasoline with the addition of operating costs and profit margins of the distributing companies.
Brent, the global benchmark, was trading at less than $45 on Thursday after dropping by more than 60 per cent since June last year. The UAE deregulated fuel prices starting August 1.
“Brent prices are going down, so it’s only natural that petrol prices in the UAE also come down,” Osama Al Ashry, member of British organisation, Society of Technical Analysts told Gulf News.
“Sooner or later, though, Brent prices will climb and petrol will be more expensive, which will put pressure on individuals and probably consumer goods too.”
According to an International Monetary Fund report in May, oil prices are expected to be $58 per barrel in 2015 before rising gradually to $74 per barrel by 2020 in response to a decline in oil investment and production and a pick up in oil demand as the global recovery strengthens.
Gary Dugan, Chief Investment Officer at National Bank of Abu Dhabi said the adjustment in the fuel price is very much aligned with the drop in the crude oil price but not one for one.
“This could mark the low for fuel prices as August is normally a seasonally weaker month for oil prices. We would expect the oil price to firm up modestly in the coming weeks.”
Meanwhile, residents are adjusting their budgets to the changes in fuel prices. Abdullah Ahmad, an Egyptian resident in Abu Dhabi, said the new prices are definitely good news but prices are still higher than they originally were in July.
“So far, the increase is marginal so it doesn’t personally affect me but there will be some pressure when oil prices climb back. As someone who lives and works in Abu Dhabi, I’ve already adjusted my budget to the slight increase but the situation is probably harder for those that commute between Abu Dhabi and Dubai every day.”
Karima Marzouqi, a Dubai resident said lower prices will help.
“People were under some sort of pressure when prices went up this month. Nice to know they have been reduced.”
The Fuel Price Committee will next meet on September 28 to agree on the prices for October.
(With inputs from Sarah Diaa, Staff Reporter, Abu Dhabi)