UAE Fuel Prices: Possible September Drop?

In September, Can Fuel Prices Drop Further in the UAE?

Fuel prices are always a topic of keen interest for the residents of the United Arab Emirates, especially for those using vehicles and businesses in transportation and logistics. The prices for September are already a matter of speculation since the global market prices in August showed a moderate decline, which could boost consumer optimism.

Why might prices decrease?

The price of Brent crude oil averaged $66.91 per barrel in August, which is lower than July's average of $69.87. This drop is mainly tied to the OPEC+'s decision to increase production in September, potentially leading to an oversupply in the market. Simultaneously, demand was also subdued, partly due to reduced activity in the summer period.

As the month drew to a close, Brent closed at $67.73 per barrel, while WTI was $63.66, which reinforces expectations that fuel prices in the UAE might slightly decrease in September.

How are the prices determined?

In the UAE, fuel prices are updated monthly, typically on the last day of the month. The pricing is based on global crude oil prices, considering the Brent and WTI trends, refining costs, and export-import dynamics.

This system is transparent and closely follows global market trends. Therefore, the mild decrease observed in August was not surprising:

Super 98: 2.69 dirhams per liter in August, down from 2.70 in July

Special 95: 2.57 dirhams in August, a slight decrease from 2.58 in July

E-Plus 91: 2.50 dirhams in August, down slightly from 2.51 in July

These changes are small but could have a significant impact on the budgets of residents who refuel regularly over the long term.

Impact of fuel prices on daily life

Fuel prices play a crucial role in the lives of UAE residents, especially in Dubai and Abu Dhabi, where car use is almost indispensable. As the population continues to grow, so does the number of vehicles. Recent data suggest that over 3.5 million vehicles are on the roads in Dubai during the day.

Even a small decrease in fuel prices can offer noticeable relief, particularly for those traveling long distances daily, such as commuters, taxi drivers, courier companies, or transporters.

What influences oil prices?

Global crude oil prices are shaped by several factors. One of them is OPEC+'s decision on production. For September, the organization decided to increase production, which put downward pressure on prices.

Additionally, the strong demand from US refineries, the use of strategic reserves, and rising exports also affect the rates. According to the commodity strategy head at Saxo Bank, although liquidity is lower during the summer, geopolitical factors such as the Russia-Ukraine conflict, or US pressure against India's Russian oil imports, might have a stabilizing effect on prices in the short term.

Medium-term trends, however, will continue to be determined by OPEC+'s supply decisions and the expected slowdown in demand, so no significant price increases are expected in the coming months – but neither are steep declines.

What to expect in September?

If oil prices remain at their current level, a further decrease of 1-2 fils in September fuel prices could occur in the UAE. This may not seem like a large change, but considering its long-term impact – especially for fleet managers and frequent car users – it can lead to significant savings.

The price announcement is expected to happen on the last day of August and will take effect from September 1.

Tips for cost-conscious drivers

While price developments depend on external factors, some simple practical tips can help make vehicle use more cost-effective:

Drive economically: Avoid sudden accelerations and braking, which increase consumption.

Check your tires: Incorrect tire pressure significantly increases consumption.

Time your refueling: Refuel after the turn of the month if a price drop is expected.

Use fuel-tracker apps: Various applications can help track prices and consumption.

Summary

The issue of fuel prices always plays a central role in the lives of UAE residents. As for September prices, moderate optimism prevails, especially in light of global oil market trends. If prices remain at the current level, a further decrease is possible – albeit minimal.

It is worth monitoring the official announcement and planning travel, refueling, or even the fuel procurement of logistics businesses accordingly. Cost-consciousness and forward planning are key in the current economic environment, especially in a dynamically developing country like the United Arab Emirates.

(Source of the article: based on Brent and WTI per barrel prices.)