UAE Fuel Prices Set to Increase for Second Consecutive Month in September

Petrol prices in the UAE are scheduled to rise for the second straight month in September, driven by ongoing volatility in global oil markets as a peace deal between the US and Iran remains out of reach.

Drivers across the Emirates will face the following fuel costs in September:

• Super 98: Dh3.80, up from Dh3.60 in August
• Special 95: Dh3.69, up from Dh3.49
• E-Plus 91: Dh3.61, higher than Dh3.41
• Diesel: Dh4.30, up from Dh3.80

Fuel costs in the UAE have been directly tied to the global oil market since deregulation was introduced in 2015. Prices at the pump in the Emirates fell for the first time in five months in July, following a drop in crude prices when the US and Iran agreed to a ceasefire. Both major oil benchmarks, Brent and West Texas Intermediate, had previously surged to intraday highs of about $126 a barrel and $119 a barrel in late April.

After dropping sharply, prices climbed again in August as tensions reignited, pushing Brent back above $94 a barrel and US marker WTI to $87 per barrel. Throughout the six-month conflict, the two benchmarks have followed a cyclical path, with signs of progress in negotiations easing supply fears and pulling prices lower, only for renewed hostilities to send them higher again.

Rhetoric intensified after Washington announced its toughest economic sanctions on Tehran early last week, prompting Iran to vow retaliation. However, the resumption of negotiations between the two sides, alongside the involvement of mediators such as Qatar and Pakistan who stepped up efforts to hasten the process, has helped ease oil markets once more. Oil prices steadied recently and posted their first weekly losses in three weeks, with Brent and WTI retreating by about 5 per cent.

While petrol prices traditionally move in synch with oil benchmarks, discrepancies can occur due to various factors influencing monthly fuel costs. Ahmed Zaheer, a consultant at Dubai-based Qamar Energy, noted that the UAE system is better understood as linked to international refined product markets rather than the spot price of crude on the exact day a motorist fills up.