The Ministry of Energy has announced fuel prices for the month of August in the UAE. Fuel prices in the UAE are updated every month and a number of factors are considered by the Ministry of Energy to set new fuel prices. Announcement about the new fuel prices was made on July 31, 2018, and according to this announcement, fuel prices have been increased for the fifth time in 2018. It is, however, important to note that for the month of August, prices have been increased only for petrol variants while the price of diesel has been decreased.
Fuel Prices for August 2018
Fuel prices are now subject to 5% Value Added Tax (VAT) that has been implemented in the UAE from the start of 2018. If we look at the fuel price trends of 2018, five out of eight months have recorded an increase in fuel prices so far, which has made commuting in a private vehicle costlier as compared to last year. Fuel prices remained unchanged in April while the months of March and July recorded a decrease in prices.
For the month of August, the prices for all types of petrol have been increased by a fil per litre while the diesel price has been decreased by 3 fils per litre. The new fuel prices by fuel-type are given below:
- The price of Super 98 will be AED 2.57/Litre for the month of August.
- The new price of Special 95 will be AED 2.46/Litre.
- The new price of diesel will be AED 2.63/Litre.
Fuel prices have jumped to a record-breaking level during 2018, which has mounted immense pressure on motorists to manage their fuel expense effectively. The table below shows the fluctuations recorded in fuel prices from the start of 2017. It clearly indicates that the petrol prices for August 2018 are the second highest while the diesel price is the third highest in the last 20 months.
The fuel prices for August in the #UAE as announced by the UAE Fuel Price Committee ⛽ pic.twitter.com/7X3m0Fjdr7
— ENOC (@ENOC) July 31, 2018
How are Fuel Prices set in the UAE?
There are three major factors that are considered by the Ministry of Energy while determining the new fuel prices in the UAE. The Ministry of Energy takes into account the latest Brent price (the global benchmark for crude oil), Platts Benchmarks (latest information on price of crude oil and gasoline products) and the transportation cost of fuel to set new fuel prices in the UAE. Fuel prices for the upcoming month are announced at the end of each month so that motorists are well-aware of the updated fuel prices and can plan their next month’s fuel budget accordingly.
The fluctuations in fuel prices are mainly a result of fluctuations observed in the price of Brent. These fluctuations make it extremely difficult for motorists on a tight budget to plan their monthly fuel budget. The addition of 5% VAT to the fuel prices has made things even more difficult for motorists on a tight budget and it is a major reason why fuel prices have increased more drastically during 2018 as compared to 2017.
Also read: An Introspective Analysis of Fuel Price Trends in the UAE during the First Half of 2018
What Does the Future Hold for Fuel Prices in the UAE?
Fuel prices were increased for 8 out of 12 months during 2017 and the situation is no different in 2018 so far. As mentioned earlier, the fuel prices have been increased 5 out of 8 times during 2018, which indicates that the increase in fuel prices can be expected in the coming months as well. In the current state of affairs, it is important for motorists to start thinking of means to put a cap on their fuel expense. Besides adopting fuel-saving practices to limit fuel expense, motorists can also think of switching from their combustion engine vehicle to an Electric Vehicle (EV). EVs are powered by electric batteries and don’t require conventional fuel at all, which makes them an excellent alternative to conventional vehicles for motorists in the UAE.
Electric vehicles ensure zero emissions and this is the reason why authorities in the UAE have also been encouraging motorists to shift from conventional vehicles to EVs. A number of incentives and benefits have also been offered to EV buyers and owners to promote the sales of EVs across the country. With the fuel prices expected to fluctuate in the upcoming months as well, purchasing an electric vehicle can be an excellent option for motorists in the UAE.
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