Abu Dhabi: The Ministry of Energy announced new petrol prices for December. The prices are less compared to November and are lower than before deregulation began in July.
The per litre prices for December are Super 98: Dh1.79; Special 95: Dh1.68; E Plus-91: Dh1.61. And diesel price has been fixed at Dh1.83 per litre. The new fuel prices will come into effect from December 1.
In July, the Ministry of Energy announced that fuel prices would be deregulated and a new pricing policy linked to global prices would be adopted. The move is expected to help the government cut Dh9.1 billion in fuel subsidies.
The UAE is the first country in the Gulf region to undertake such reforms. Bahrain is studying whether to cut fuel subsidies as drop in oil prices hurts its economy.
Speaking to Gulf News, Head of Fuel price committee and Under Secretary of Ministry of Energy Dr. Matar Al Neyadi said that the new price will have a positive impact on the cost of goods.
“Transportation is an important factor in deciding the price of goods. As the fuel charge goes down it should reflect in a positive way in the price of goods. I hope the price gets reduced.”
“The fuel prices announced for December are lower than before deregulation began in August,” he added.
“The aim of deregulation of fuel prices is to protect the natural resources and change the driving habits of people. Other Gulf countries too are studying this.”
Mathias Angonin, an analyst with Moody’s Investors Service Middle East, said inflation is currently trending higher than in previous years, driven by housing costs and to a lesser extent, transportation costs.
“While UAE inflation came at 4.3 per cent in September, the cost of housing and transportation increased 5.9 per cent and 8.3 per cent, year-on-year. Nevertheless, they came down [from] higher levels of 9.9 per cent and 10.7 per cent in August.”
“We expect the slowdown in housing costs and fuel prices to bring inflation back to more moderate levels of 3-3.5 per cent by the end of the year.”
He said fuel prices are unlikely to soar in the next few months.
“At Moody’s, we expect brent oil to average $55 per barrel this year and $53 per barrel next year. And we expect the government to continue basing its pricing model on international market prices, in line with the July subsidy reform.”
Global oil prices have dropped by more than 50 per cent in the past year as supply increases in the market. From more than $100 per barrel last year, Brent, the global benchmark, plunged to less than $45 this week.
The prices for November are Super 98: Dh1.81; Special 95: Dh1.70; E Plus-91: Dh1.63, with diesel at Dh1.87 per litre.