Suhail Al Mazrouei, Minister of Energy, says deregulation of fuel costs benefits commerce and country. Ravindranath K / The National
Suhail Al Mazrouei, Minister of Energy, says deregulation of fuel costs benefits commerce and country. Ravindranath K / The National

Minister of Energy confident revised fuel prices are positive step

ABU DHABI // Minister of Energy Suhail Al Mazrouei says the new petrol prices announced on Tuesday are still relatively low, given the lack of tax.

From Saturday, the price for a litre of Special 95 will increase from Dh1.72 to Dh2.14 – a rise of 23.6 per cent. Super 98 has been set at Dh2.25 and E Plus at Dh2.07. But diesel is now Dh2.05, a 29 per cent drop from its previous price of Dh2.90.

“I don’t think people will give up their cars,” said Mr Al Mazrouei. “There is a segment of people with very low incomes making Dh1,000 or Dh1,500 salaries a month. This is not healthy. They should use the services [public transport] that the Government is providing them with.

“If the small increase of a few hundred dirhams in their monthly budget is straining their budget, then they’ll have to make a choice.”

The prices will be fixed for the month and new figures will be announced on day 28 of each month thereafter.

Despite the rise, prices in the UAE would remain relatively low, he said. “We wanted to be fair with the consumers and fair with the distributing companies; this is a total liberation.

“We were transparent with the consumers and we will continue to be transparent with them. Our prices will be lower than any liberated market because there’s no tax and we reduced the profitability of the companies downwards.”

He said companies would benefit from the reduced diesel price. “We think that the impact on diesel is going to be positive. The reduction in diesel is going to be 85 fils, a 29 per cent decrease.

“This should drive down the operating and transport costs for many sectors using diesel. Some of the public transport companies have announced lower tariffs already.

“We are working with consumer protection agencies to ensure that the consumer will benefit from these lower costs and changes in diesel prices.

“We haven’t seen high volatility in the price of gasoline at the pump in the past six months. If there is, people will see a gradual effect. If the prices go down, the pump price will go down.”

Mr Al Mazrouei added: “People always say that prices go up and up but this is something that we haven’t seen before, that gasoline prices could actually go down too.”

Dr Matar Al Nyadi, Undersecretary for the Ministry and chairman of the Fuel Price Committee, said the new prices were based on average global prices during this month, with the addition of transport, distribution and operating costs – as approved by the Cabinet for distribution companies.

He said the committee would monitor global prices daily.

“The ministry has coordinated with all relevant entities in the country including the Ministry of Economy and the Supreme Committee for Consumer Protection to monitor the movement of prices and safeguard the rights of consumers,” said Dr Al Nyadi.

“This will ensure that people across the country benefit from lower diesel prices, which would mean lower operating costs for a wide number of vital sectors such as industry, shipping and cargo.”

The changes would promote “rationalised consumption” and would incentivise people to choose the most fuel-efficient cars, while curbing the increase in cars on the country’s roads.

The Ministry of Energy announced the deregulation of fuel prices last Wednesday. The move aims to support the economy, lower fuel consumption, protect the environment and conserve national resources.

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