Sunday, Oct 30, 2016

Abu Dhabi: Fuel prices in the UAE are set to increase next month, the Ministry of Energy announced on Sunday.

The new per litre prices for November are Super 98-Dh1.90, up from Dh1.81 in October, Special 95-Dh1.79, up from Dh1.70; E Plus-91-Dh1.72, up from Dh1.63.

The price of diesel has gone up by fifteen fils from Dh1.76 in October to Dh1.91 in November.

The new fuel prices are announced as global crude oil prices recover due to discussions among member countries of the Organization of the Petroleum Exporting Countries (Opec) to curb output levels to stabilise oil prices.

Opec agreed on September 28 in Algeria to reduce output to a range of 32.5 million to 33 million barrels a day and decide how much each member should cut by its next meeting on November 30 in Vienna.

The agreement helped push oil prices to a fifteenth month high of about $50 a barrel earlier this month although they have subsequently fallen amid doubts the group will follow through in its pledge.

Some countries like Iraq and Iran are insisting that they should be exempted from the deal as they try to ramp up production to increase their revenue. There are also doubts whether Nigeria and Libya will take part in the agreement.

Iraq says they need more money to fight Daesh, whereas Iran wants to increase production to reach pre-sanction levels of around four million barrels per day. Nigeria and Libya’s production is hit due to militancy and unrest.

Francisco Quintana, Head of Strategy at Foresight Advisors told Gulf News the negotiation will be fraught with difficulties, even before starting the discussion about limits.

“If Opec wants to give exemptions to Iran, Nigeria and Libya, it seems like Saudi Arabia would have to absorb a substantial reduction, which they would do to avoid a collapse of the agreement and the subsequent collapse in prices.”

“Still, the agreement will be insufficient to bring a structural change to oil prices, which we expect range-bound in the next twelve months.”

Oil prices are currently trading slightly below $50 per barrel with the global benchmark Brent at $49.71 per barrel and the US benchmark West Texas Intermediate (WTI) at $48.70 per barrel.

The new fuel prices come into effect from Tuesday.

By Fareed Rahman Senior Reporter

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