Oil prices fell 15 per cent in May to $91, but fuel relief to be limited for UAE motorists
Dubai: UAE motorists are expected to see little change in fuel prices for June, with analysts forecasting either a slight increase or broadly stable rates despite a recent decline in global oil prices.
The UAE’s monthly fuel prices are linked to international oil market averages, and while Brent Crude has fallen significantly in recent weeks, prices throughout most of May remained higher than April’s average, keeping upward pressure on local fuel rates.
Brent crude traded at around $103 per barrel for much of May before falling below the $100 mark and reaching approximately $91 per barrel towards the end of the month. The decline followed signs of progress in negotiations between the United States and Iran, which helped ease concerns about global supply disruptions.
However, because UAE fuel prices are calculated using monthly average oil prices rather than end-of-month rates, the lower prices seen in recent days are unlikely to translate into substantial savings at petrol stations in June.
The main factor influencing oil markets remains the Strait of Hormuz, through which around 20 percent of the world’s oil and fuel supplies pass. Although regional tensions have eased compared with earlier months, shipping activity has not yet fully returned to normal, keeping markets cautious.
Under the UAE’s fuel pricing mechanism introduced in 2015, monthly petrol and diesel rates reflect international energy market movements with a one-month lag.
April fuel prices reflected the sharp surge in oil markets during March, while May rates were influenced by elevated crude prices throughout April. June pricing will now be based primarily on May’s average oil market performance.
Industry observers expect petrol prices to remain largely stable or record only a modest increase, while diesel prices may continue to face pressure due to higher transportation and logistics costs globally.
Analysts note that fuel prices typically do not fall immediately after crude oil retreats from peak levels. Instead, markets often move through a stabilisation phase before motorists experience meaningful reductions at the pump.
Looking ahead, the direction of fuel prices during the summer will depend largely on whether Brent crude remains below $100 per barrel, the outcome of ongoing US-Iran negotiations, and the pace at which shipping activity normalises through the Strait of Hormuz.
The UAE Fuel Price Committee is expected to announce official petrol and diesel prices for June on Saturday.
