Qatar follows UAE in letting domestic fuel prices fluctuate in subsidy reform



Qatar will allow its domestic gasoline and diesel prices to fluctuate in response to changes in global markets as it seeks to reduce waste of fuel and save money for the state budget.

Currently, local fuel prices are fixed at low levels, requiring the government to spend on subsidies to keep them down. From next month, prices will fluctuate monthly, the official Qatar News Agency (QNA) said on Tuesday.

Future prices will be based on a formula that includes global levels, production and distribution costs within Qatar, and prices elsewhere in the region, QNA said without giving further details of the formula.

Qatar’s state budget has been strained as low international oil and gas prices have slashed its export revenues, so it has been looking for ways to save money.

In January, the government raised domestic prices of gasoline by 30 per cent, but at 1.30 riyals ($0.357) per litre, the price of Super 97-Octane gasoline remained among the lowest in the world, encouraging a preference among drivers for huge sports utility vehicles.

Sheikh Mishaal bin Jabor al-Thani, chairman of a government-led commission studying the issue, told QNA on Tuesday that the new system would not necessarily mean higher domestic prices, but that they could now rise and fall when global levels moved.

Other Gulf countries have implemented or are considering such a reform as low oil prices pressure their finances; the UAE moved to a similar formula for domestic fuel prices last year.

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UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
At a glance

Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.

 

Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year

 

Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month

 

Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30 

 

Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse

 

Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth

 

Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances

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