The petrol prices are rising globally and UAE cannot distance itself from the global trend. In tune with the ascending prices in the international market, UAE on Monday increased petrol prices for the month of June, taking the price to its highest level ever since UAE announced it’s de-regulations in 2015. The increase could trigger a hike in inflation, but the effect might be mitigated by the falling rentals and some corporates absorbing the recently introduced VAT.
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The price of 98unleaded petrol (super) has gone up from Dh2.49 per litre in May to Dh2.63 in June, which is an increase of 14fils or 5.6 percent. Prices of 95 Unleaded (Special) has been increased by 14 fils or 5.9 percent from Dh2.37 to Dh2.51. prices of unleaded (E-plus) will also go up by 14 fils from Dh2.30 in may tk Dh2.44 in June.
Monica Malik, chief economist, Abu Dhabi Commercial Bank said that rise in fuel prices in June would put an additional pressure on consumers along with the value added tax which was levied in January 2018.
” We have seen some drop in inflation in March but it start rising again in April. But significant rise in fuel price in will result in acceleration in inflation as a result of that in May and June. The positive development is the discussion between Opec group to increase production and that could be a good sign” Malik said.
She pointed out that reducing rentals and some corporates absorbing the VAT are also helping the consumers against the rising fuel prices and inflation.
The diesel price for the month of June has been set at Dh2.71 for the next month as compared to Dh2.56 for this month.
Brent and WTI were trading at $75.4 and $66.88 per barrel, respectively, at 4.50pm UAE time on Monday. Both had lost nearly one per cent after Saudi Arabia and Russia announced on Friday that they were discussing the possibility of raising oil production by some one million barrels a day. In addition, the uptick in US crude production, prompted steep declines in crude futures last week.
According to Bank of America Merrill Lynch analysts, oil prices in UAE will peak in mid 2019.
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