If you’re already annoyed with the amount of bodies on the Metro every evening during rush hour, things might be about to get more cramped. Dubai residents might be more prone to hopping on the train to get to and from work now that the rules for fuel prices are about to change.
The UAE will liberalise domestic gasoline and diesel prices from August 1, the energy ministry said in a statement carried by state news agency WAM on Wednesday.
Domestic fuel prices are currently among the lowest in the world because of heavy state subsidies. Allowing prices to move more freely would reduce pressure on the state budget and could be one of the UAE's biggest economic reforms in recent years.
The ministry said it would decide on the 28th of each month levels of domestic fuel prices in the following month. It said gasoline and diesel prices would now be based on an average of global prices, but did not give details of the pricing formula or say whether prices would rise all the way to global levels.
The reform will support the UAE economy and save fuel, the ministry said.
Suhail Al Mazroui, UAE Minister of Energy, said: "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. This step will put the UAE on par with countries that follow sound economic methodologies. It is also anticipated to improve the UAE’s competitiveness while positioning the nation on international indices."
Al Mazroui said deregulating fuel prices would help decrease fuel consumption and encourage individuals to adopt fuel-efficient vehicles, including the use of electric and hybrid cars.