The UAE Ministry of Energy has announced that fuel prices will be deregulated as of August 1, 2015. A new pricing policy linked to global prices will be adopted instead.
The decision, related to petrol and diesel, is aimed at boosting the economy, lowering fuel consumption, protecting the environment and preserving national resources, national news agency WAM reported on Wednesday.
The move comes just weeks after a survey found that petrol in the UAE is already three times the price of some other GCC countries.
The survey said the price of a litre of petrol in the UAE is Dhs1.73.
Suhail Al Mazroui, Minister of Energy, said that in accordance with the new pricing policy, which has been ratified by the UAE Cabinet, a fuel price committee has been set up to review fuel prices in the UAE compared to average international levels every month.
The committee is chaired by the Undersecretary of the Ministry of the Energy and includes members the Undersecretary of the Ministry of Finance, the CEO of ADNOC Distribution and the CEO of Emirates National Oil Company (ENOC).
He added that the cost of gasoline represents 3 per cent to 4 per cent of an average income in the UAE, which is a reasonable percentage compared to international costs. Consequently, deregulating prices would not have a notable impact on individuals’ costs of living, Al Mazroui added.
He said: “The decision to deregulate fuel prices has been taken based on in-depth studies that fully demonstrate its long-term economic, social and environmental impact. The resolution is in line with the strategic vision of the UAE government in diversifying sources of income, strengthening the economy and increasing its competitiveness in addition to building a strong economy that is not dependent on government subsidies”.
Speaking about the potential environmental benefits of the decision, Al Mazroui said that deregulating fuel prices would help decrease fuel consumption and preserve natural resources for future generations. It will also encourage individuals to adopt fuel-efficient vehicles, including the use of electric and hybrid cars, he added.
Al Mazroui said that increasing the use of public transport and reducing dependence on individual vehicle usage will have a positive impact in lowering carbon emissions.
