A petrol pump attendant at an Eppco filling station. Image Credit: Gulf News Archives

Abu Dhabi: The Ministry of Energy has reduced fuel prices for January in line with global crude prices, which have been dropping due to oversupply and weak demand.

According to an announcement on Thursday, Super 98 fuel will cost Dh2 per litre in January, down from Dh2.25 in December, Special 95 will be priced at Dh1.89 per litre in January down from Dh2.15 in December.

Similarly, E plus 91 will be sold at Dh1.81, down from Dh2.05 in December and diesel will be cheaper by 31 fils from Dh2.61 in December to Dh2.30 in January.

This is the first time in over a year that motorists will be paying less than Dh2 per litre at petrol stations. In August 2017, fuel prices fell to less than Dh2 per litre with Special 95 priced at Dh1.78 per litre.

From more than $85 per barrel in October, global benchmark Brent fell to $50 per barrel this week.

The Organisation of Petroleum Exporting Countries (Opec) and non-Opec members like Russia are cutting production by 1.2 million barrels per day from January 1 in order to shore up oil prices.

Analysts expects oil prices to continue drifting lower if the economic pessimism persists into 2019.

“However if some of the concerns about the health of the global economy — escalating trade tensions, the uncertainty surrounding Brexit, the Fed’s latest rate hike and the ongoing US government shutdown — start to ease, then a potential rebound in oil prices could be swift,” said Ehsan Khoman, head of Mena research and strategy at MUFG Bank Ltd.