UAE: Here's why retail fuel prices fluctuate every month

Fuel prices in the UAE has been increased to more than Dh4 per litre for the month of July 2022, the highest price ever since the government liberalised retail fuel prices.

Following the deregulation over six years ago, prices dropped from nearly Dh2.3 per litre to around Dh1.5 within the first few months as prices were aligned with the global crude oil rates. But prices later recovered to the previous level.

After the outbreak of the Covid-19 pandemic, UAE’s Ministry of Energy retained prices below Dh2 per litre to assist residents and consumers to cope with the challenges of the pandemic.

Here is a guide on retail fuel prices in the UAE:

- When did UAE liberalise oil prices?

Retail fuel prices were deregulated in August 2015.

- When are fuel prices are adjusted?

Fuel prices in the UAE are adjusted by the Ministry of Energy in the last week of every month and retailers Adnoc, Enoc and Emarat implement new prices from the first of every month.

- Why did UAE liberalise oil prices?

According to the UAE government, subsidies on fuel encourage higher consumption and lower conservation. Therefore, the UAE liberalized fuel prices to help rationalise fuel consumption and encourage the use of public transport in the long run, as well as incentivise the use of alternative fuels.

- How are fuel prices are adjusted?

Oil prices are adjusted based on the fluctuations of the global crude price in the previous month. Retail fuel prices are based on Platts global refined petroleum product price benchmarks plus a regulated margin set by the UAE Ministry of Energy to compensate retailers for transportation costs and operating expenses.

waheedabbas@khaleejtimes.com

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