Special gasoline will now cost Dh1.72 a litre while the ‘Super’ variety will sell for Dh1.83 per litre.

The companies said the increase was part of a ‘liberalisation’ process, Wam reported.

Motorists, however, aren’t  amused and questioned the decision. ‘‘Didn’t they just increase the fuel prices? Why is it being hiked again?” asked a surprised Tobias Fernandes, a Dubai-based customer service representative.

“If petrol is hiked by 20 fils, that means I’ll be paying more to fill my 35-litre tank,” he said.

Sameer Yousaf, a Pakistani expat, who works with a travel and tourism agency, said the move was unfair.

“No matter how you look at it, it’s unfair and expensive. I thought it was expensive when they had hiked the fuel prices not so long ago. I spend around Dh25 to Dh30 on gas every day, so it’s not a good move,” he said.

Others like Nadia Arif, a student who drives from Ajman to Knowledge Village, Dubai, decided to grin and bear it. “I think this will force us into using public transport like the Dubai Metro.’’

A leading economist in Abu Dhabi, Riad Mattar questioned the hikes, which he feared would be ‘inflationary’.

But, Waqar Qadir, the chief executive of Dubai-based Green Ways Transport, said that the public transport charges would not go up. Qadir, who drives a 5.2 litre vehicle, said he would have to spend Dh300-400 more every month on fuel.

‘‘After the economic crisis, the national economy was coming out of woods, so it is not a good time to increase fuel prices,’’ he said.

But a senior official with an oil company said that the three oil marketing companies were losing around Dh2 a gallon with crude prices touching $75 a barrel. According to an energy analyst, oil marketing and distributing companies in the UAE lost about Dh1 billion last year.

Abu Dhabi’s Adnoc Distribution and Dubai-based Emirates National Oil Company (Enoc), Emirates Petroleum Products Company (Eppco) and Emarat, are facing losses as they sell petrol at prices below international market rates.

An oil official justified the hike and said: “They purchase oil at Dh9 per gallon and sell it at Dh6.88, to suffer a net loss of Dh2.12 per gallon.”

Similar hikes could be expected this year’ to cover losses, which were still significant, said an official in the know.

While oil prices are being liberalised in the UAE, in the rest of GCC, governments have provided subsidies. In Oman, the price of petrol is Dh5.75 a gallon, mirroring a trend in Saudi Arabia and Qatar.

The UAE is seeking to boost domestic refining capacity as economic development in recent years has seen consumption rising.

In order to meet domestic demand, there are plans by Abu Dhabi Refining Company, or TAKREER, and ENOC to create more capacity.

TAKREER, which refines 490,000 barrels per day of oil at its two refineries in Umm Al Nar and Ruwais, has awarded contracts valuing $9.6 billion to South Korean firms to double the capacity by adding another 417,000 barrel capacity by 2014.

ENOC is expanding its Jebel Ali refinery in Dubai to add 120,000 barrels a day refining capacity.

Oil halted a three-day advance in New York as traders viewed last week’s climb above $76 a barrel as excessive, given signs that US economic growth may falter.