Why UAE Petrol Prices Are Deregulated

From August 2015, fuel prices in UAE have been deregulated...

The change then saw a new pricing policy be introduce, which was linked to global prices - the decision was aimed at supporting the national economy, lowering fuel consumption, protecting the environment and to help preserve national resources.

The decision to remove the current state regulations on the prices of gas and diesel in the UAE came into effect on the 1st August, 2015.

Speaking on the change, Suhail Al Mazroui, the Minister of Energy said that the "decision to deregulate fuel prices has been taken based on in-depth studies that fully demonstrate its long term economic, social and environmental impact".

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As a result of the deregulation of UAE fuel prices, prices could slightly increase - and will vary month to month in accordance with global prices.

A fuel price committee has been set up to review the UAE fuel prices against average international levels, which was approved by the UAE Cabinet, and is chaired by the Undersecretary of the Ministry of the Energy. The committee also includes the Undersecretary of the Ministry of Finance, the CEO of ADNOC Distribution, and the CEO of Emirates National Oil Company (ENOC).

“The resolution is in line with the strategic vision of the UAE government in diversifying sources of income, strengthening the economy and increasing its competitiveness in addition to building a strong economy that is not dependent on government subsidies,” said Mr Al Mazroui. “This step will put the UAE on par with countries that follow sound economic methodologies.

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“It is also anticipated to improve the UAE’s competitiveness while positioning the nation on international indices.”

The move will also have environmental benefits, will preserve natural resources for future generation and encourage the use of fuel-efficient vehicles, including the use of electric and hybrid cars, said Mr Al Mazroui.

The decision will also encourage the use of public transport rather than a reliance on individual vehicle usage. This in turn will reduce carbon emissions, he said.