UAE petrol prices defy expectations with surprise drop in November

UAE petrol prices are set to decrease in November, marking the first reduction in four months, despite global oil markets experiencing a sharp increase in October due to heightened tensions in the Middle East. Super 98 petrol will drop to Dh4.16 per litre, a 5.5 per cent decrease, while Special 95 will fall by 5.6 per cent to Dh4.04.

E-Plus 91 will decrease by 5.7 per cent to Dh3.97 per litre, and diesel will see a 1 per cent reduction to Dh4.75. Despite still being 80 per cent higher than in February, prior to the Iran war, the cost of fuel in the UAE is still influenced by global oil prices. The cost of fuel in the UAE has been linked to the global market since 2015, following the introduction of deregulation.

However, petrol prices do not always move in tandem with these benchmarks. Factors such as crude prices, vessel attacks, and piracy affect monthly fuel costs, though governments can also play a role in moderating these prices. In October, crude prices reached six-month highs and posted a fourth consecutive monthly increase. Brent crude, the benchmark for two thirds of the world's crude, rose 2.4 per cent to $117.64 a barrel, while West Texas Intermediate gained 2.08 per cent to settle at $104.12 a barrel.

Analysts had previously anticipated a rise in UAE pump prices in November, attributing this to the recovery in Middle East oil supplies and geopolitical risks, including vessel attacks on the Strait of Hormuz and Houthi attacks on Saudi Arabia.