Petrol prices have been hiked for the past three consecutive months due to a rally in global oil rates, rising nearly 50 per cent between February and May
The UAE’s fuel prices committee is set to announce petrol prices for the month of June later this week to align them with global rates.
Petrol prices could rise for the fourth consecutive month as crude oil stayed above $100 a barrel in May due to the closure of the Strait of Hormuz after the US-Israel-Iran war.
Brent’s average closing price was around $106 a barrel in May, compared to around $99 a barrel in April, as the oil supply shortage due to the Hormuz closure keeps crude prices on the higher side.
In the UAE, petrol rose for the third consecutive month in May, with Super 98, Special 95 and E-Plus trading at Dh3.66, Dh3.55 and Dh3.48 per litre, respectively. Petrol prices have risen by approximately 50 per cent since February, when Super 98 was selling at Dh2.45 per litre, an increase of Dh1.21 a litre.
Brent and WTI closed at $103.5 and $96.6 a barrel over the weekend.
The UAE recorded its highest-ever petrol prices in 2022 after the Russia-Ukraine war, when prices surpassed Dh4 a litre for the first time ever in the country. In July 2022, petrol prices reached record levels, with Super 98 priced at Dh4.63 per litre and Special 95 at Dh4.52 per litre.
Monthly petrol price adjustments in the UAE have a direct impact on household budgets. Because fuel is a recurring, essential expense for most families, even small monthly changes can add up over time. When prices rise, motorists may have to allocate a larger portion of their income to petrol.
However, oil prices could ease in the coming days if the US and Iran move closer to a peace deal.
Rania Gule, senior market analyst for Mena at XS.com, said any anticipated agreement between Washington and Tehran would exert direct downward pressure on oil prices due to expectations that part of the Iranian oil supply will return to global markets.
“This would increase global supply and reduce the geopolitical risk premium that has supported prices in recent periods. Therefore, oil will initially move in a downward trajectory, potentially ranging between 4 per cent and 8 per cent during the first phase following an official announcement,” she added.
