On Monday, the UAE Fuel Price Committee cut petrol prices by AED 0.24 or more than 8% per liter for October to match global oil rates. This price reduction marks the lowest plummet since January 2024.
For October, the prices for Super 98, Special 95, and E-Plus 91 will be AED 2.66, AED 2.54, and AED 2.47 per liter, respectively. To compare, the January fuel price cut led Super 98, Special 95, and E-Plus to retail for AED 2.82, AED 2.71, and AED 2.64 per liter, respectively. Since the deregulation of oil prices in the UAE in 2015, the country has revised fuel prices at the end of every month. In September, Brent oil prices dipped below $70 a barrel. As of Monday afternoon, Brent and WTI were trading at $71.62 and $69.98 per barrel, respectively.
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On average, different octane levels of petrol, represented by Super 98, Special 95, and E-Plus 91 will be lowered by about 8.6%, while diesel prices get about a 6.47% reduction on a per liter basis, compared to rates in September. This comes in after global crude oil prices are facing headwinds from increased supply from Libya and falling demand prospects from China.
Arun Leslie John, Chief Market Analyst at Century Financial, spotlighted the impact of lower fuel prices on businesses and consumers. “Businesses that rely on road logistics can benefit from reduced operational costs, allowing them to offer lower prices forward or increase profitability metrics. Meanwhile, consumers can benefit from the increased disposable income which can drive consumption in other sectors and boost the economy, directly resulting from reduced fuel expenditure.
John elaborates on the correlation between fuel price cuts and the UAE’s booming automotive industry, which reported “23,084 new car sales in June 2024”. He adds “Lower fuel costs can act as an additional catalyst to boost demand for this sector which saw an 11.5% growth in H1 2024 compared to the last year.”
Milad Azar, market analyst at XTB Mena told Khaleej Times “The risk of a broader conflict in the Middle East is raising concerns about interruptions in oil supply. Supply disruptions could drive oil prices higher. As a result, traders could remain cautious and monitor new developments in the area.” However, he anticipates global demand to replenish after US crude inventory figures are released on Wednesday.
* This article has been updated with comments from Arun Leslie John at Century Financial
