UAE Fuel Prices Set for January Drop
Fuel Prices in UAE Expected to Drop January 2025
In the United Arab Emirates (UAE), fuel prices may see a slight decrease in January 2025, following an average Brent oil price of $73.06 per barrel in December 2024, slightly down from $73.2 in November. Although this price difference is minimal, it may reflect in consumer prices due to the country's fuel price regulation system.
How does fuel pricing regulation work in the UAE?
Since 2015, the UAE has deregulated fuel prices, meaning they are adjusted monthly in line with international oil prices. Fuel price revisions occur on the last day of each month, with changes taking effect immediately. This system allows residents and businesses to pay fuel costs that reflect global oil price fluctuations.
In December 2024, local fuel prices were as follows:
Super 98: 2.61 dirham/liter
Special 95: 2.50 dirham/liter
E-Plus: 2.43 dirham/liter
These prices saw a reduction of approximately 0.13 dirhams from the previous month, marking the most favorable rates in 2024.
The influence of the global oil market
Global oil prices remained stable at the year's end. West Texas Intermediate (WTI) was priced at $70.65 per barrel, while Brent oil was around $74. According to Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, oil remained in the "bearish consolidation zone" as the market awaited improvements in China’s economic situation and expected the global oversupply, projected at around 1 million barrels per day in 2025, to narrow.
What can be expected in January?
January’s fuel prices could be influenced by the trading patterns of the last two days of the year. If oil prices show significant fluctuations, it may lead to a rise in January prices. However, current trends suggest that a price decrease is more probable.
For consumers, lower fuel prices mean not only direct savings but also contribute to reduced logistical costs, which in turn can affect the prices of food and other essential goods.
Why is the price decrease important?
Fuel costs have a significant impact on the daily expenses of UAE residents and businesses. Lower prices could assist budget-conscious families and support the local economy by reducing transportation and logistics costs.
Additionally, falling prices might make the UAE even more attractive to tourists and businesses, particularly during a period when the country is striving for further economic growth and diversification.
Summary
In January 2025, UAE fuel prices are expected to trend favorably based on a slight decrease in Brent oil prices and a stable global oil market. The flexibility of fuel price regulation allows residents to directly benefit from global market advantages while preparing for long-term price movements.
