(MENAFN- Gulf Times) The UAE cut petrol and diesel prices by between 8% and 9% for September, the second month during which the Middle Eastern country, Opec's fifth-largest oil producer, removed price controls.
The decline in retail gasoline partially rolled back an increase in August, the first month in which the government eliminated subsidies and allowed pump prices to fluctuate according to global markets. Motorists will pay 8.4% less for 95-octane gasoline in September than they did this month, according to data posted on the energy ministry website yesterday. The fuel will sell at 1.96 dirhams a litre and diesel will cost 9.3% less at 1.86 dirhams a litre, it said.
The UAE is the first among Gulf countries to eliminate fuel subsidies as falling oil prices erode government income.
The six-nation Gulf Cooperation Council has discussed efforts to align fuel prices, though none of the other members has yet moved to allow fuel prices to follow the market. The UAE previously charged 1.72 dirhams a litre, or 47 cents, for 95 -octane gasoline.
Saudi Arabia, the largest Arab economy and top producer in the Organisation of Petroleum Exporting Countries, charges the least for gasoline in the region at 16 cents a litre.
"We're now back at a gasoline price that's hardly above the old subsidised price," Robin Mills, a Dubai-based analyst at Manaar Energy Consulting, said by phone. "This vindicates the approach of seizing the opportunity of low oil prices to cut subsidies. For others in the region with even lower fuel prices, it will be harder to ease subsidies in one step."
Brent crude, the global benchmark, has declined 14% this month as a global glut of crude combined with concern that slowing growth in China may mean less oil demand.
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