UAE Fuel Costs Rise: Bread, Dairy And Cooking Oil Among Items Expected To Get Pricier

Fresh fruits and vegetables, dairy products, and frozen and chilled foods are most at risk of price increases following the recent fuel price hike in the UAE, according to senior executives at leading supermarket chains.

Top retailers told Khaleej Times that price increases would be gradual and consumers should not expect an automatic rise across supermarket shelves.

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Petrol prices were hiked by eight per cent for June 2026, the fourth consecutive monthly increase this year, due to a surge in international oil prices. Petrol prices have increased by nearly one-third, or 66 per cent, since February 2026. In June, Super 95, Special 95 and E-Plus 91 have been priced at Dh3.95, Dh3.83 and Dh3.76 a litre, respectively.

"Products that are heavily dependent on transportation, cold-chain logistics and imports are likely to witness a relatively higher increase in prices. This may include fresh vegetables, fruits, dairy products and certain imported FMCG items. Since fuel costs affect movement across the entire supply chain, packaging and distribution expenses also contribute to gradual price adjustments across multiple categories," said Dr Dhananjay Datar, chairman and managing director of Al Adil Trading.

According to Kamal Vachani, deputy CEO, group director and partner at Al Maya Group, products that are imported or transported over longer distances may experience some upward pressure on pricing due to increased logistics costs. "This typically includes imported packaged foods, frozen items, and goods with higher distribution dependency. However, we are working closely with our suppliers to keep any adjustments minimal and gradual."

Mark Mortimer-Davies, CEO of Choithrams, believes the pressure is most likely to be felt in products that require temperature-controlled transport or frequent replenishment, such as fresh produce, dairy, chilled and frozen foods.

Mortimer-Davies stressed, however, that consumers should not expect an automatic increase across supermarket shelves. "Fuel is only one element of a product's total cost, and for many grocery items the impact is relatively small when compared with factors such as raw materials, manufacturing costs and currency movements. The reality is that most retailers and suppliers will look for efficiencies elsewhere before considering price increases," he added.

"There is a perception that a large increase in fuel prices automatically leads to a similar increase in grocery prices, but that is rarely the case. For most supermarket products, transport costs represent only a small proportion of the final retail price. Even a substantial rise in diesel costs therefore translates into a much smaller impact at shelf level," he said, adding that at this stage he does not expect fuel costs alone to drive any meaningful increase in overall grocery inflation.

"Any pricing decisions will continue to be made category by category, taking into account supplier costs, market conditions and, most importantly, the need to remain competitive for customers," he added.

Dr Datar noted that if fuel prices remain elevated for a sustained period, grocery prices could see a gradual increase of around 3 to 8 per cent, depending on the product category and sourcing origin.

He added, however, that there is a continued effort to absorb part of these increases to minimise the impact on consumers.

Vachani noted that he expects any potential increase to be moderate, as the retailer is actively absorbing a portion of the cost internally. "Our aim is to protect consumers as much as possible while maintaining sustainable operations."

Mortimer-Davies said the recent increase in fuel prices is significant, but Choithrams' immediate focus is not on raising prices but on improving efficiency.

"We are optimising delivery routes, increasing truck utilisation, reducing unnecessary journeys and moving more volume through our distribution centres rather than direct store deliveries. We are also working closely with suppliers to identify efficiencies across the supply chain. Retailers have a responsibility to absorb as much of these cost increases as possible before they reach consumers. In a highly competitive market such as the UAE, simply passing on every increase is not a sustainable strategy," he added.

Al Maya Group, according to Vachani, is working on optimising its supply chain and logistics efficiency to absorb external cost pressures such as fuel price fluctuations.

"We are focusing on route optimisation, better load planning, and stronger supplier negotiations to minimise the direct impact on our operations. Our priority is to ensure that these macroeconomic changes do not immediately or significantly affect our customers."

Dr Datar said the company is closely monitoring the impact of rising fuel prices and taking several internal measures to reduce the burden on customers.

"We are focusing on efficient inventory planning, bulk procurement, and optimising our logistics network to control transportation costs. In addition, our long-standing supplier relationships help us negotiate better terms and absorb part of the increased operational costs wherever possible. Our priority is to ensure essential grocery items remain affordable for our customers," he added.

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