The United Arab Emirates (UAE) has announced a shift in petrol and diesel prices for the upcoming month of February. After witnessing consecutive price drops in November, December, and January, petrol prices are slated to rise, while diesel will see a decrease. This decision reflects the volatility of the global oil market, with various factors influencing the cost of fuel for consumers.
Petrol and diesel prices
Following an increase in September and October, prices saw a consecutive decrease in the subsequent three months. This pattern mirrors the uncertainty observed in the global oil market, where geopolitical tensions and economic indicators play pivotal roles. For February, the breakdown of petrol and diesel prices per liter reveals the following changes:
- Super 98: AED2.88, up by 2.1 percent from AED2.82 in January
- Special 95: AED2.76, witnessing a 1.8 percent increase from AED2.71 in January
- Diesel: AED2.99, experiencing a 0.3 percent decrease from AED3 in January
- E-plus 91: AED2.69, up by 1.8 percent from AED2.64 in January
UAE’s liberalized approach
In 2015, the UAE took a bold step by liberalizing petrol and diesel prices, allowing them to align with market dynamics. However, the onset of the COVID-19 pandemic in 2020 prompted the fuel price committee to freeze prices. The committee lifted controls on petrol and diesel in March 2021, signaling a return to market-driven pricing.
Read: Oil prices fall as China’s economic activity weighs on sentiment
Global factors influencing fuel prices
UAE’s petrol and diesel price adjustments are based on the global oil market dynamics. Recent tensions in the Middle East have fueled concerns about oil supply. Last week, oil recorded its most significant weekly gain since October, driven by the potential for increased demand and geopolitical uncertainties.
Moreover, OPEC+ continues to play a crucial role in shaping the oil market. In November, the group extended voluntary output cuts until the end of the first quarter of 2024. Hence, it is aiming to balance the market amidst uncertainties about future fuel demand. Therefore, key players like Saudi Arabia and Russia are maintaining significant output cuts to stabilize global oil prices.
Factors like geopolitical tensions, economic growth indicators, and OPEC+ decisions will continue to influence UAE’s petrol and diesel prices, making them a closely watched space for both economists and everyday commuters.
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