Brent’s late-August decline offers some relief, but monthly oil averages remain high.
Dubai: UAE motorists will learn the September petrol and diesel prices today, with recent oil-market movements suggesting a mixed outlook after Brent crude fell sharply in the final full trading week of August.
Brent crude settled at $89.31 a barrel on Friday, marking a weekly decline of more than 5%. The drop came amid speculation that progress could be made towards an agreement on shipping through the Strait of Hormuz, although oil flows through the strategic waterway remain uneven.
The late-August decline raises the prospect of some relief at the pump. However, the broader monthly trend makes a significant price cut less certain. Brent’s average closing price for much of August stood at around $87.70 a barrel, up from approximately $83.46 in July, according to market estimates.
A modest reduction or broadly stable fuel prices therefore appear more likely than a sharp cut. However, the UAE Fuel Price Committee’s final rates cannot be predicted solely from crude oil prices, as other market factors also influence the monthly adjustments.
Current UAE fuel prices
UAE motorists are currently paying Dh3.60 per litre for Super 98, Dh3.49 for Special 95, Dh3.41 for E-Plus 91 and Dh3.80 for diesel in August. These prices reflect movements in global energy markets during the preceding period.
A typical car with a 60-litre tank using Special 95 currently costs Dh209.40 to fill from empty, while filling an 80-litre tank costs Dh279.20.
If September prices were reduced by 10 fils per litre, the cost would drop to Dh203.40 for a 60-litre tank and Dh271.20 for an 80-litre tank, translating into savings of Dh6 and Dh8 respectively. A 20-fils-per-litre reduction would save Dh12 on a 60-litre fill and Dh16 on an 80-litre fill.
These examples show how different fuel-price changes could affect motorists’ costs, but they should not be viewed as predictions of the UAE’s official September fuel rates.
Does cheaper Brent mean cheaper petrol?
The UAE has operated a market-linked fuel pricing system since August 2015, with the Fuel Price Committee reviewing retail rates each month based on international market prices. The system was introduced to bring domestic fuel prices closer to global trends while promoting economic competitiveness and more efficient energy consumption.
However, UAE petrol prices do not move in direct lockstep with the latest Brent crude price. Instead, the pricing mechanism considers international benchmarks for refined petrol and diesel over the preceding weeks, along with operating and transportation costs. This means changes in crude prices can take time to filter through to the prices motorists see at the pump — an important factor when assessing September rates.
What August oil prices show
Oil prices began August well below their later-month levels.
Brent crude closed at $83.77 a barrel on August 3 and slipped below $80 during the first week before staging a strong recovery as geopolitical concerns resurfaced. By August 21, Brent had risen to around $94.39 a barrel, before pulling back sharply during the final week of the month.
Friday’s Brent settlement of $89.31 a barrel marked a weekly decline of more than 5%. Despite the drop, the price remains about 6.6% higher than the $83.77 closing level recorded at the start of August.
This highlights why September’s UAE fuel-price calculation cannot be based solely on Brent’s latest decline. While the sharp fall towards the end of August could support lower pump prices, oil traded at higher levels for much of the month compared with July, making the outlook less straightforward.
What changed in the final week?
The key shift was the rapid easing of some of the geopolitical risk premium that had pushed oil prices higher.
Brent crude fell by more than 5% during the final full trading week as markets assessed reports of potential progress towards reopening the Strait of Hormuz. The strategic waterway typically accounts for around 20% of global oil flows, making any developments there significant for international energy markets.
Shipping conditions have improved to some extent, but tanker traffic remains below normal and uncertainty persists.
Meanwhile, global refined-product markets continue to remain relatively firm. This is another factor limiting the extent to which the recent drop in crude prices can translate into lower UAE petrol prices.
How September prices could look
Based on the latest market trends, a modest reduction in UAE fuel prices now appears somewhat more likely than it did earlier in August, when Brent was rising rapidly towards the mid-$90s.
A reasonable scenario would be for UAE petrol prices to remain broadly stable or see a modest decline. For illustration, a reduction of 5–15 fils per litre would bring Super 98 to around Dh3.45–Dh3.55, Special 95 to Dh3.34–Dh3.44 and E-Plus 91 to Dh3.26–Dh3.36.
However, these ranges are illustrative rather than forecasts. The Fuel Price Committee’s refined-product benchmarks and the full details of its pricing formula are not publicly disclosed, making it impossible to calculate September’s official rates with precision.
A sharp reduction also appears difficult to justify based on crude prices alone, given that Brent remained above July’s levels for a significant portion of August.
Can petrol prices return to Dh3?
A return to Dh3 per litre would require a much larger price adjustment than the modest monthly movements currently indicated by international oil markets.
At August’s rate of Dh3.49, Special 95 would need to drop by 49 fils per litre — roughly 14% — to reach Dh3. Super 98, currently at Dh3.60, would require a 60-fils reduction, or nearly 17%.
However, there is no specific Brent crude price that would automatically bring UAE petrol down to Dh3. Retail fuel prices are influenced by international refined-product benchmarks and monthly averages rather than a fixed crude-to-pump-price formula.
A sustained decline in both crude oil and refined-product prices would therefore be more significant than Brent briefly falling below any particular price level.
What to expect today
The clearest signal ahead of today’s announcement is that international oil prices lost momentum towards the end of August, creating a more favourable backdrop for UAE fuel prices following August’s increases.
However, higher average oil prices during the month, coupled with continued firmness in refined-product markets, suggest that Friday’s sharp weekly decline in Brent is unlikely to translate directly into an equally significant drop at UAE petrol stations.
This points to broadly stable or modestly lower prices as the most reasonable expectation for September, with the likelihood of a small reduction increasing after Brent’s late-August retreat.
Whatever the Fuel Price Committee announces today, the revision will continue to follow the UAE’s established market-linked pricing system, through which sustained movements in international energy markets gradually feed into domestic petrol and diesel prices.
