Petrol prices will be 4 per cent cheaper for UAE residents starting on Wednesday, while the price of diesel will slightly increase.
The UAE Ministry of Energy announced on Monday that consumers will pay Dh2.03 a litre for Super 98, a 4.25 per cent drop from October’s figure of Dh2.12. Special 95 will decline 4.48 per cent to Dh1.92 from Dh2.01, and E Plus will cost Dh1.85, down from Dh1.94. Diesel prices will rise to Dh2.11, a 0.5 per cent gain from last month.
The cost of petrol and diesel in the UAE has fluctuated with the market for nearly two years, since the Ministry of Energy began liberalising fuel prices using “benchmark prices” which have not been publicly disclosed. Petrol and diesel are made from crude oil, which means that the price of oil impacts the price to fill up a car tank.
This month, the international benchmark, Brent crude, tipped US$60 per barrel marking its highest since mid-2015. The upward trend has been influenced by Saudi Arabia's crown prince signalling the kingdom's support for extending Opec production cuts at the organisation's upcoming meeting at the end of November. In addition, the ongoing conflict between Kurdistan and Iraq has called into question Iraq's ability to add more oil to an already over-supplied market.
The World Bank forecast oil prices to average $56 a barrel next year, up 5.6 per cent from this year’s $53, according to its Commodity Markets Outlook report. “Energy prices are recovering in response to steady demand and falling stocks, but much depends on whether oil producers seek to extend production cuts,” said John Baffes, senior economist and lead author of the Commodity Markets Outlook.