The UAE Fuel Price Committee has announced a significant reduction in petrol prices for October, marking the lowest levels seen since January 2024.
The prices for Super 98, Special 95, and E-Plus 91 have been reduced by Dh0.24 per litre, representing a decrease of over 8 per cent. This adjustment aligns local fuel prices with international oil rates.
For the month of October, motorists will pay Dh2.66 per litre for Super 98, Dh2.54 for Special 95, and Dh2.47 for E-Plus 91. In comparison, prices for these fuel grades in August were Dh2.90, Dh2.78, and Dh2.71 per litre, respectively.
The previous lowest prices in 2024 were recorded in January, when Super 98 sold for Dh2.82, Special 95 for Dh2.71, and E-Plus for Dh2.64 per litre.
The UAE has been adjusting fuel prices on a monthly basis since deregulating oil prices in 2015. The government’s decision to align petrol prices with global market conditions is intended to keep the local market competitive and reflective of the changing international oil landscape.
Falling International Oil Prices
The decline in domestic fuel prices for October is largely attributed to falling global oil prices. Brent crude oil fell below $70 per barrel in September, reflecting a softening of demand across global markets.
As of Monday afternoon, Brent crude was trading at $71.62 per barrel, while West Texas Intermediate (WTI) stood at $69.98 per barrel.
Oil prices have faced downward pressure due to concerns about weak demand, particularly in key markets like China and the US.
These concerns were exacerbated last week, with traders wary of reduced economic activity in China, a major oil consumer. In addition, high crude oil inventories in the US have further dampened market sentiment.
Potential for Oil Supply Disruptions
While oil prices have been dropping, analysts are monitoring developments in the Middle East for potential supply disruptions. Milad Azar, a market analyst at XTB Mena, noted that the risk of conflict in the region could have significant repercussions for the global oil market.
“The risk of a broader conflict in the Middle East is raising concerns about interruptions in oil supply,” Azar said. “Supply disruptions could drive oil prices higher. As a result, traders could remain cautious and monitor new developments in the area.”
The possibility of supply interruptions could reverse the downward trend in oil prices, as traders weigh the risks of reduced production from key Middle Eastern oil producers.
Recovery Efforts and Future Projections
Market sentiment could also be impacted by recovery efforts in China. The Chinese government has been implementing measures to boost economic activity, and additional policies aimed at stimulating demand could lead to a rebound in oil prices.
“Additional measures from China could help improve market sentiment and could help lift prices,” Azar added. “Markets could also monitor demand levels in the US, another important market.”
Looking ahead, US crude inventory figures, set to be released on Tuesday and Wednesday, will be closely watched by analysts to assess demand expectations.
A further decline in US crude stockpiles could signal an uptick in demand, which would potentially stabilize or lift oil prices in the coming weeks.
For now, UAE motorists will benefit from the price reductions, with October bringing some relief at the pump after a summer of elevated fuel costs.