Higher prices reflect reality

The price of fuel in the UAE is steadily increasing as it is brought into line with the real cost to companies of providing it to residents in the UAE.

Besides the price of a barrel of oil, fuel suppliers must also absorb refinery and distribution costs, among others. If these costs are absorbed by the fuel companies, they show up on the balance sheet as losses or deprive owners and shareholders of income that can be invested elsewhere to help grow the economy. Artificially cheap fuel also discourages residents from using petrol in an efficient and environmentally conscious way.

Consumers will feel the pain in their pockets while the price of fuel in the UAE is brought in line with its actual costs. However, once the real price of fuel in the country is established, residents should in future also benefit from a drop in the international price of oil or other production and distribution costs.