Diesel prices to dip and petrol prices to rise, says UAE fuel price-setting chairman
The chairman of the UAE’s new fuel price-setting committee says he expects diesel prices to dip and petrol prices to rise slightly.
Starting on Tuesday, the panel would determine retail fuel prices on a monthly basis, said Matar Al Nyadi, an undersecretary at the Ministry of Energy and chairman of the gasoline and diesel prices committee.
The fuel prices will be determined by the average prices from the previous month recorded by various international fuel price trackers – such as Oil Price Information Service – plus a margin for the distribution companies, Abu Dhabi National Oil Company and Emirates National Oil Company.
Mr Al Nyadi did not disclose which benchmark or margin level would be used, but said it would become apparent over the next few months.
“We think the price of diesel initially will go down a little and gasoline might go slightly up,” he said.
“The idea of liberating the market, we believe, is that it is healthy to have an open market. It will help reduce consumption and bring more efficient use and encourage a more efficient type of car that will be introduced.”
The liberalisation of fuel prices is part of a three-pronged policy initiative that includes the introduction of more fuel-efficient specifications for cars in coordination with other GCC member countries, as well as new plans for public transport.
“We are already designating new lines for buses and looking at incentives to encourage use of public transportation,” said Mr Al Nyadi.
Although initial petrol price increases should be too slight to be felt by everyday Emiratis because of the UAE’s relatively high income levels, he said the increases should be sufficient to make residents think about being more fuel-efficient.
“It should help change behaviour and encourage greater use of public transport,” said Mr Al Nyadi, adding that it might also free up more refined petroleum products for export from the newly expanded refining facility in Fujairah.
Follow The National’s Business section on Twitter
Updated: July 22, 2015 04:00 AM