The UAE and other oil producers on Sunday cut output to 40.46 million barrels per day till the end of the year, resulting in a spike in global oil prices. This is the second output cut by the Opec+ members in the past two months. On April 2, oil producers announced a surprise cut in production of 1.64 million barrels a day.
On Monday morning, oil was trading at a five-week high after oil producers announced an output cut which will take effect from July 1, 2023. The WTI crude was trading at $72.63 per barrel, up 1.24 per cent, while Brent was 1.13 per cent to $76.99 a barrel on Monday morning, helped by the Opec+ decision.
Since the UAE deregulated oil prices in 2015, any fluctuations in the global rates directly reflect in the local rates next month when the Fuel Price Follow-up Committee revises every month.
For the month of June, retail petrol prices were reduced by 21 fils per litre across all three variants of Super 98, Special 95 and E-Plus, bringing them to the lowest level in four months. Currently, Super 98 petrol costs Dh2.95 per litre, Special 95 at Dh2.84 per litre and E-Plus 91 at Dh2.76 a litre.
In April 2023, when oil-producing group Opec+ slashed output, prices of petrol rose globally, hence, retail prices in the UAE went up, too, for the month of May. The Fuel Price Follow-up Committee raised prices by 15 fils per litre for May across all three variants – Super 98, Special 95 and E-Plus.
Considering the alignment of local petrol prices with the global rates and the impact of April's cut in output on petrol prices, it is likely that the rate could be revised upward for the month of July if the global oil prices maintain a higher level in June. However, a final decision is most likely to be announced Friday, June 30, by the Fuel Price Follow-up Committee.