Fuel Price Changes
Discussion
Here we go...
Fuel Prices to be deregulated with effect from 1 August, 2015
ABU DHABI, 22nd July, 2015 (WAM) --- The Ministry of Energy has announced that fuel prices would be deregulated as of 1 August, 2015. A new pricing policy linked to global prices will be adopted. The decision, related to gasoline and diesel, is aimed at supporting the national economy, lowering fuel consumption, protecting the environment and preserving national resources.
Suhail Al Mazroui, Minister of Energy, said that in accordance with the new pricing policy that has been ratified by the UAE Cabinet, a fuel price committee has been set up to review fuel prices against average international levels prior to their implementation in the UAE every month. Chaired by the Undersecretary of the Ministry of the Energy, the committee includes as members the Undersecretary of the Ministry of Finance, CEO of ADNOC Distribution, and CEO of Emirates National Oil Company (ENOC).
Making the announcement, Suhail Al Mazroui, Minister of Energy, 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. 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."
Speaking on the environmental benefits of the decision, Suhail 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 noted that the decision would encourage the use of public transport. The transport sector was responsible for 22% of the total greenhouse emissions in the UAE in 2013 amounting to 44.6 million tons of carbon dioxide. Given this stark reality, he added that increasing the use of public transport and reducing dependence on individual vehicle usage will have a positive impact in lowering carbon emissions. In this regard, the Minister of Energy pointed out that the UAE has an advanced public transport system with options that are environmentally friendly such as taxis that work on natural gas.
The Minister said: "Considering the international prices of oil and petroleum derivatives, we expect diesel prices to go down. This will stimulate the economy as lower diesel price would mean lower operating costs for a wide number of vital sectors like industry, shipping and cargo among many others."
He added that the cost of gasoline represents 3% to 4% 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 elaborated that the decision will contribute positively to the UAE’s investment environment, enhance its economic competitiveness, and support the policy of a free-market economy with no direct interference from the government. Stating that the deregulated fuel prices will also lead to a sustainable economy that is based on open market standards, he said the decision will further strengthen the UAE’s status as an attractive destination for foreign investments, complementing its advanced legislative economic environment, state of the art infrastructure, ease of conducting business, free movement of capital, and other competitive features that set the country’s economy apart from others.
For his part, Dr. Matar Al Nyadi, Undersecretary, of the Ministry of Energy and Chairman of the Gasoline and Diesel Prices Committee, said that the role of the Ministry of Energy and Ministry of Finance as the government’s representatives in the committee will focus on consumer protection and ensure that petrol prices are balanced according to international standards. He added that the pricing mechanism is structured in a way that it does not rely on just one global market and will facilitate distribution companies to make reasonable profits and to limit their losses while offering premium services.
Al Nyadi also said that the committee will urge distribution companies to increase their operational efficiency to lower their costs, and eventually impact positively the prices of gasoline and diesel at petrol stations. He added that the committee will hold periodic meetings and monitor global prices. On the 28th of each month, the committee will announce the prices for the following month. In line with this decision, prices of gasoline and diesel for August will be announced on Tuesday 28 July, based on the average global prices with the addition of operating costs.
Fuel Prices to be deregulated with effect from 1 August, 2015
ABU DHABI, 22nd July, 2015 (WAM) --- The Ministry of Energy has announced that fuel prices would be deregulated as of 1 August, 2015. A new pricing policy linked to global prices will be adopted. The decision, related to gasoline and diesel, is aimed at supporting the national economy, lowering fuel consumption, protecting the environment and preserving national resources.
Suhail Al Mazroui, Minister of Energy, said that in accordance with the new pricing policy that has been ratified by the UAE Cabinet, a fuel price committee has been set up to review fuel prices against average international levels prior to their implementation in the UAE every month. Chaired by the Undersecretary of the Ministry of the Energy, the committee includes as members the Undersecretary of the Ministry of Finance, CEO of ADNOC Distribution, and CEO of Emirates National Oil Company (ENOC).
Making the announcement, Suhail Al Mazroui, Minister of Energy, 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. 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."
Speaking on the environmental benefits of the decision, Suhail 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 noted that the decision would encourage the use of public transport. The transport sector was responsible for 22% of the total greenhouse emissions in the UAE in 2013 amounting to 44.6 million tons of carbon dioxide. Given this stark reality, he added that increasing the use of public transport and reducing dependence on individual vehicle usage will have a positive impact in lowering carbon emissions. In this regard, the Minister of Energy pointed out that the UAE has an advanced public transport system with options that are environmentally friendly such as taxis that work on natural gas.
The Minister said: "Considering the international prices of oil and petroleum derivatives, we expect diesel prices to go down. This will stimulate the economy as lower diesel price would mean lower operating costs for a wide number of vital sectors like industry, shipping and cargo among many others."
He added that the cost of gasoline represents 3% to 4% 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 elaborated that the decision will contribute positively to the UAE’s investment environment, enhance its economic competitiveness, and support the policy of a free-market economy with no direct interference from the government. Stating that the deregulated fuel prices will also lead to a sustainable economy that is based on open market standards, he said the decision will further strengthen the UAE’s status as an attractive destination for foreign investments, complementing its advanced legislative economic environment, state of the art infrastructure, ease of conducting business, free movement of capital, and other competitive features that set the country’s economy apart from others.
For his part, Dr. Matar Al Nyadi, Undersecretary, of the Ministry of Energy and Chairman of the Gasoline and Diesel Prices Committee, said that the role of the Ministry of Energy and Ministry of Finance as the government’s representatives in the committee will focus on consumer protection and ensure that petrol prices are balanced according to international standards. He added that the pricing mechanism is structured in a way that it does not rely on just one global market and will facilitate distribution companies to make reasonable profits and to limit their losses while offering premium services.
Al Nyadi also said that the committee will urge distribution companies to increase their operational efficiency to lower their costs, and eventually impact positively the prices of gasoline and diesel at petrol stations. He added that the committee will hold periodic meetings and monitor global prices. On the 28th of each month, the committee will announce the prices for the following month. In line with this decision, prices of gasoline and diesel for August will be announced on Tuesday 28 July, based on the average global prices with the addition of operating costs.
Onetrackmind said:
Any idea how much prices are likely to go up?
Ive had two locals in today looking to switch out of V8s due to the upcoming price rises, asked both of them they have no idea what its going to but have said the government will adjust the prices on the 28th of every month.IanUAE said:
VAT will only be introduced when it is introduced across the GCC other wise the UAE will become more expensive than other GCC countries and businesses will move away.
Petrol will go up for 1 month, the locals will complain and it will come down again...... I hope.
If petrol doesn't go up too much personally it wont be a major concern but it really does depend how much they add on it.Petrol will go up for 1 month, the locals will complain and it will come down again...... I hope.
Vat supposedly is signed off and starting in October, hopefully neither happen but both now look inevitable.
VAT will happen.
Anything other than a very small introduction of any taxes (other than the point-of-use stuff we have now) and skilled people will start to leave.
If I'm going to pay tax, I'll pay it somewhere civilised.
Also, if they start other taxes, which they will down the line, then there must be representation - that'll never happen.
Anything other than a very small introduction of any taxes (other than the point-of-use stuff we have now) and skilled people will start to leave.
If I'm going to pay tax, I'll pay it somewhere civilised.
Also, if they start other taxes, which they will down the line, then there must be representation - that'll never happen.
Asterix said:
VAT will happen.
Anything other than a very small introduction of any taxes (other than the point-of-use stuff we have now) and skilled people will start to leave.
If I'm going to pay tax, I'll pay it somewhere civilised.
Also, if they start other taxes, which they will down the line, then there must be representation - that'll never happen.
Couldn't agree more, if they are taking money from peoples wages then the people need a say in how its spent, as you say that will never happen.Anything other than a very small introduction of any taxes (other than the point-of-use stuff we have now) and skilled people will start to leave.
If I'm going to pay tax, I'll pay it somewhere civilised.
Also, if they start other taxes, which they will down the line, then there must be representation - that'll never happen.
Stylus said:
As if this place isn't expensive enough, the rental market in AD is unrelenting just now!
Any ideas by how much the fuel price is likely to go up?
Is the VAT addition only rumours just now?
Rumours on the fuel are anything between 3-6dhs a litre, I cant see it getting near 6dhs as that must be way above international average and massively more than the cost price to produce, but who knows. They must have a balancing act based on how many cars are going to come off the road, loss in Salik, re-registration etc etc to how much extra is needed to generate in fuel revenue.Any ideas by how much the fuel price is likely to go up?
Is the VAT addition only rumours just now?
No idea what will have to taxi prices however as they are all petrol?
Vat apparently is signed off, company owners I know are all re-arranging accounts etc to factor in its imminent arrival which people are saying is October.
it was only recently they wanted to drop fuel prices to the level of the other GCC countries.
bringing it up to 6dhs a litre is madness. the cost of everything will increase, taxi fares will increase, inflation will rocket overnight. low end workers will be squeezed dramatically.
i'm with you. any meaningful impact on my wallet and what's the point in being here? if they go down this route in 10yrs time all who'll be living here is arabs and indians.
bringing it up to 6dhs a litre is madness. the cost of everything will increase, taxi fares will increase, inflation will rocket overnight. low end workers will be squeezed dramatically.
Asterix said:
VAT will happen.
Anything other than a very small introduction of any taxes (other than the point-of-use stuff we have now) and skilled people will start to leave.
If I'm going to pay tax, I'll pay it somewhere civilised.
Also, if they start other taxes, which they will down the line, then there must be representation - that'll never happen.
what is the proposed vat rate?Anything other than a very small introduction of any taxes (other than the point-of-use stuff we have now) and skilled people will start to leave.
If I'm going to pay tax, I'll pay it somewhere civilised.
Also, if they start other taxes, which they will down the line, then there must be representation - that'll never happen.
i'm with you. any meaningful impact on my wallet and what's the point in being here? if they go down this route in 10yrs time all who'll be living here is arabs and indians.
shirt said:
what is the proposed vat rate?
i'm with you. any meaningful impact on my wallet and what's the point in being here? if they go down this route in 10yrs time all who'll be living here is arabs and indians.
Vat rate has not been disclosed, ive heard 5% from a couple of people but no one really knows, also no idea what its going to be applied to. Food would be crazy, will it just be general retail, cars, malls etc (but they need this for tourists all the sales of watches/bags etc)i'm with you. any meaningful impact on my wallet and what's the point in being here? if they go down this route in 10yrs time all who'll be living here is arabs and indians.
But agreed, rents are sticking not dropping despite the amount of people which appear to be leaving, my building never and I mean never has more than 1/2 flats up for rent currently 8 according to security, I know of buildings with entire floors empty but rents just stay the same.
Fuel going up, vat on everyday items everything will increase, taxis will become a fortune unless they switch to diesel cars and quick, its not good. Has the place ran out of money completely?
t - I won't be here.shirt said:
they couldn't switch to diesel, the size of the fleet is too vast. lpg at a push. nice conditions for a starter business.
at least the petrol station will be less crowded.
wonder what this place will look like come expo time
Yup fleet is too big and I doubt anyone will have any or enough diesel sedans in stock for them to buy anyways.at least the petrol station will be less crowded.
wonder what this place will look like come expo time
Im sure be some magical card at the fuel station, anything government linked will get it at the old subsidised rate.........
After_Shock said:
I sell cars so no doubt doubling or trebling fuel prices is not exactly going to be great for business, can see me sat looking out of a dreary car showroom in the north east of England by the end of the year.
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