After four months of consecutive fuel price increases, drivers in the UAE will finally see a decrease in gasoline prices in July. This occurs as global oil prices have significantly dropped after peaking due to tensions in the Middle East.

Since the start of the war on February 28, fuel prices in the UAE have risen by more than 60%; an increase largely attributed to disruptions in shipping through the Strait of Hormuz and concerns over global oil supply shortages.

In June, the price per liter of fuel was set as follows:

Super 98: 3.95 AED

Special 95: 3.83 AED

Eco Plus 91: 3.76 AED

Diesel: 4.33 AED

This increase has put significant pressure on drivers. For example, the cost of filling a 60-liter Super 98 tank rose from about 147 AED in February to around 237 AED in June. Additionally, the cost of filling an 80-liter tank for SUVs increased from about 196 AED to 316 AED.

Why is there a high likelihood of price reduction in July?

The oil market conditions in June were completely different from the previous month.

While the fuel price in June was calculated based on the average oil price in May (around 106 USD per barrel), Brent crude oil prices experienced a downward trend in June, falling from about 95 USD at the beginning of the month to around 70 USD; nearly the same level seen before the war began.

Brent crude oil prices even dipped below 72.5 USD for a time.

Since fuel prices in the UAE are determined based on the average monthly oil price, this continuous decrease is likely to be directly reflected in July's prices.

Unless new tensions arise in the region or a fresh disruption in oil supply occurs, the likelihood of a significant drop in fuel prices in July is very high.

“Concerns about a prolonged energy crisis due to the conflict in Iran are diminishing, and oil prices are returning to pre-crisis levels.”

How much will fuel prices in the UAE decrease?

Given the current market trend, fuel prices in the UAE are expected to see a noticeable decrease for the first time since the start of the war.

If Brent crude oil prices remain around 70 USD by the end of the month, it is predicted that:

The price of Super 98 will reach about 3.20 to 3.50 AED per liter.

The prices of Special 95 and Eco Plus 91 are also expected to decrease similarly.

Diesel prices are also likely to drop, although they typically react more slowly than gasoline.

Of course, the final price depends on the average price of crude oil and petroleum products that the UAE fuel pricing committee considers for determining July rates.

If oil prices remain in this range and political negotiations continue, July could mark the first significant decrease in fuel prices in the UAE since February; a decrease that will offset part of the heavy increases of the past four months and signal a gradual end to the fuel price shock.

Source: Gulf News