For the first time since the fuel price deregulation seven years ago, gasoline Fuel price in Dubai exceeded AED4 per litre in June 2022. While some other nations in the region continue to subsidize fuel, the UAE deregulated pricing in 2015. According to Bloomberg, the country’s gasoline costs have since risen above those in neighboring Gulf countries. Crude oil prices have risen by approximately 50% to over $100 a barrel globally since the start of 2022, which has an impact on fuel price changes.
Factors Influencing the Fuel Price in Dubai
Fuels like gasoline and diesel are created through the refinement of crude oil. Crude oil is a traded commodity on a global scale. 2015 saw the end of fuel subsidies from the UAE. Prior to this, about $7 billion was invested annually to maintain low gas and diesel prices. The UAE Fuel Price Committee now controls the price of gasoline and diesel in the UAE. They are founded on a benchmark for world petroleum prices. The price of oil determines the price of petroleum globally. To cover the retailer’s charges and expenses, a margin is added.
The UAE has far lower gasoline and diesel prices than the majority of other nations in the globe, despite the elimination of subsidies and the implementation of VAT. The majority of the price difference is due to taxes.
The price of crude oil has increased for a variety of causes, including:
- After the pandemic, there was a shortage of energy as suppliers strained to meet the increased demand.
- A rise in global crude oil prices following the February 2018 Russia-Ukraine conflict
- Economic uncertainties, inflationary pressures, and recession risk
Since Russia is one of the major oil exporters in the world, gasoline prices were obviously higher after the Russia-Ukraine war.
Many nations, including the US, have prohibited the import of Russian oil, and by the end of the year, EU leaders hope to stop the majority of Russian oil shipments. As a result of these restrictions, demand for oil from other sources has increased, pushing up prices.
Despite high oil prices worldwide in August, gas prices fell throughout the UAE. However, until other oil producers are able to raise supplies, these are unlikely to decrease further. On August 3, OPEC and its allies, led by Russia, will convene once more.