UAE residents will pay around 12 fils more per litre for petrol starting on Friday as oil prices hit a new two-year high earlier this month.
The UAE Ministry of Energy announced on Tuesday that consumers will pay Dh2.15 a litre for Super 98, a 5 per cent rise from November’s figure of Dh2.03. Special 95 will increase 6 per cent to Dh2.04 from Dh1.92, and E Plus will cost Dh1.97, up from Dh1.85. Diesel prices will rise to Dh2.20, a 4 per cent hike from last month.
For more than two years, the cost of petrol and diesel in the UAE has moved with the market as the Ministry of Energy began its liberalisation policy. The ministry uses “benchmark prices” which have not been publicly disclosed, though the prices should fluctuate with the international market. Petrol and diesel are made from crude oil, which means that the price of oil impacts the price to fill up a car tank.
The international benchmark, Brent crude, hit a new two-year high at US$64.27 on November 6 in response to Saudi Arabia’s corruption crackdown which resulted in government officials and businessmen being detained in connection with money laundering, bribery and extortion.
“The events in Saudi Arabia have added extra momentum to the rally that has driven [Brent] oil prices from lows of $45 per barrel in late June to around $63 per barrel recently,” the International Energy Agency said in its monthly oil market report released this month. However, the energy watchdog said that to date, there had not been any impact on the kingdom’s energy sector.
The change has instead come from Iraq as real interruptions in shipments fell by an estimated 170,000 barrels per day in October. The IEA said: “These supply disruptions, geopolitical concerns, a growing expectation that the OPEC/non-OPEC output accord will be extended through 2018 at the end of the month, and with demand growth still robust, largely explain firmer prices.”
The monthly average from October 27 to November 28 was $62.57, up 13 per cent from the previous month’s average. Opec will meet on Thursday to decide if it will extend production cuts.