UAE fuel prices out today: What to expect at the pump in September

DUBAI: UAE motorists will learn the official September petrol and diesel prices today, with recent movements in international oil markets suggesting a finely balanced outlook.

Brent crude ended August’s final full trading week sharply lower, settling at $89.31 a barrel on Friday, down more than 5% over the week. The decline came amid speculation about progress towards an agreement on shipping through the Strait of Hormuz, although oil flows through the strategic waterway remain inconsistent.

The late-month decline raises the possibility of some relief at UAE fuel stations. However, the broader August trend makes a significant reduction less certain.

Brent's average closing price during much of August was estimated at around $87.70, compared with approximately $83.46 in July.

As a result, broadly stable prices or a modest reduction appear more likely than a steep cut, although the final rates will depend on the UAE Fuel Price Committee's pricing calculation.

Where UAE Fuel Prices Stand Now

UAE motorists currently pay the following prices per litre in August:

Super 98: Dh3.60
Special 95: Dh3.49
E-Plus 91: Dh3.41
Diesel: Dh3.80

The prices reflect movements in global energy markets during the preceding period.

For a typical 60-litre vehicle using Special 95, filling an empty tank currently costs Dh209.40. An 80-litre vehicle costs Dh279.20.

If September prices fall by 10 fils per litre, the same fill-ups would cost Dh203.40 and Dh271.20, representing savings of Dh6 and Dh8 respectively.

A 20-fils-per-litre reduction would save Dh12 on a 60-litre tank and Dh16 on an 80-litre tank.

These examples illustrate the impact of possible price changes and should not be considered forecasts of the official September rates.

Does Cheaper Brent Mean Cheaper Petrol?

The UAE has followed a market-linked fuel pricing policy since August 2015, with the Fuel Price Committee reviewing prices every month against international market levels.

However, UAE petrol prices do not simply follow the latest Brent crude price.

The pricing mechanism considers international refined-product benchmarks over preceding weeks, along with operating and transportation costs. This means changes in crude prices can take time to appear at UAE fuel stations.

This lag is particularly important when assessing September's prices because Brent's sharp decline came towards the end of August.

What August Oil Prices Reveal

Oil prices moved considerably during August.

Brent closed at $83.77 on August 3, falling below $80 during the first week before climbing sharply as geopolitical concerns returned. By August 21, Brent had reached around $94.39.

It subsequently declined during the final week of the month, settling at $89.31 on Friday.

Although this represents a decline of more than 5% in one week, Friday's settlement remained around 6.6% higher than the August 3 closing price.

This explains why September's fuel-price outlook cannot be determined simply by looking at the latest Brent price.

Why Oil Fell in the Final Week of August

A major factor behind the recent decline was the partial unwinding of oil's geopolitical risk premium.

Brent dropped more than 5% during the final full trading week as markets assessed reports of potential progress towards reopening shipping routes through the Strait of Hormuz.

The waterway normally handles roughly 20% of global oil flows, making developments around the route particularly important for international energy prices.

While shipping conditions have shown some improvement, tanker movements remain below normal levels and uncertainty persists.

Meanwhile, global refined-product markets remain relatively firm, which could limit the impact of falling crude prices on UAE petrol rates.

How September Fuel Prices Could Look

The latest market movements suggest that a modest reduction is now somewhat more likely than earlier in August, when oil prices were moving towards the mid-$90s.

For illustration, a reduction of 5 to 15 fils per litre would place prices approximately at:

These figures are illustrative scenarios, not predictions. The Fuel Price Committee's detailed refined-product benchmarks and complete pricing calculation are not publicly available in enough detail to determine the official rates precisely.

A major reduction also appears difficult to justify based on crude prices alone because Brent remained above July's levels for a significant portion of August.

What UAE Motorists Should Expect Today

The latest oil-market movements provide a more favourable backdrop for UAE motorists, with international crude prices losing momentum towards the end of August.

However, August's higher average oil prices and relatively firm refined-product markets could prevent a substantial reduction at the pump.

For now, the most reasonable expectation is broadly stable to modestly lower petrol and diesel prices for September.

The official rates announced today will continue to follow the UAE's established market-linked pricing mechanism, through which sustained changes in international energy markets are reflected in local petrol and diesel prices over time.