It’s that time of the year when you need to fill up even when you don’t need to 🙂 Who knew I would be saying that, just a couple of months ago fuel prices rose to 2.06 for a liter of unleaded 95 and now they are at 1.58.
But wait? in around 5 months prices drop from a 20% increase to a 40% rebound which is another word for ‘major recession’ and that’s not just it, officials predict an all new low for 2016 with Saudi Arabia introducing a huge increase in consumables, fuel prices, electricity and everything else. That’s another lesson on supply and demand, but for now let’s talk about the new price list.
Let’s get technical.
In Abu Dhabi petrol prices dropped by 6 per cent while diesel dropped by a whopping 12 percent according to an announcement by the Ministry of Energy.
Special 95 sits at Dh1.58 per litre and diesel at Dh1.61 per litre while Super 98 drops to 1.69 per litre and E Plus 91 at Dh1.51 per litre counting for the 5th consecutive drop in 5 months since fuel deregulation laws have been put into place.
This reduction in fuel and diesel prices is expected to reflect a positive impact on the emirate. Head of Fuel Price Committee Dr Matar Al Neyadi commented earlier that “The decision has been implemented for the last six months. We are proud on how it is being implemented and the reaction from the market. Definitely the price of goods and services will go down,” let’s hope so.
Global oil prices are 60 per cent lower than last year from around $100 to $40, that’s a major drop that I anticipated but one must prepare for the big bear about to hit soon. Now, it is at $37,29 – I mean, if you’re still arguing that the economy is fine… But wait, Iran wants to drop their oil into the market which will further plunge the economy towards all time lows.
Daniel Ang, an Investment Analyst from Phillip Futures said:
“As long as we are still experiencing an excess of supply, low prices should persist,” Ang said.
“We are currently testing the 2008 lows and would think this would hold. I would ultimately think that if the bearishness turned out stronger than expected, prices could reach $30, but to reach lower, would be unexpected,” he said.