A member of the UAE’s Federal National Council (FNC) has urged authorities to lower petrol prices in the country in order to better reflect the current international trend.
Hamad Ahmad Al Rahoumi, an FNC member from Dubai, will question the UAE’s energy minister Suhail Mohammed Al Mazroui during the session on February 3 about why fuel prices in the Emirates are still high despite a fall in international crude prices.
Petrol prices in the UAE are among the highest in the GCC despite being subsidised by the government.
Although prices in the country are capped, the government has previously made occasional changes to reflect the international trend.
“The government hiked prices of petrol and fuel oil in recent years, driven by the worldwide high oil price,” Al Rahoumi was quoted as saying in local daily Gulf News.
“Now, with the oil prices falling sharply, it is not passing on the benefits to the consumers. It raises the question of why the government has not reduced petrol pump prices.
“It seems that the free market forces are working only one way in the UAE – that’s upward. Prices in the UAE always go up but never fall down.”
Brent crude has lost more than 50 per cent of its value since last June, reaching a six-year low this year.
The sharp fall in oil prices has also made most Gulf countries, which depend on hydrocarbon revenues, cautious of their expenditure.
Many GCC countries are said to be insulated from the oil price slide due to large fiscal reserves amassed during a period of high oil prices.
But experts say that there is a risk of some Gulf states posting a budget deficit over the next few years due to the lack of economic diversification and over dependence on oil revenues.
As a result, some GCC countries have taken steps to curtail public spending.
In a major step, Kuwait scrapped its subsidies on diesel and kerosene from January 1, 2015. The government is also mulling potential cuts in petrol subsidies.
Meanwhile, Oman too has said that it is likely to start cutting some state subsidies this year. In December 2014, Oman-based cement firms said that the government has doubled the price of natural gas for commercial use in these firms.