UAE fuel prices could slip again in August.
Motorists may notice a smaller reduction at the pump after two months of price cuts, as market analysts point to volatile crude trends and lingering geopolitical risks.
What the market data suggests
Brent crude averaged around $87 per barrel in July, up from $85 in June, according to market reports. The price swing reflects ongoing volatility linked to tensions involving Iran, disruptions to regional shipping routes, and uncertainty over the Strait of Hormuz.
Even with the higher Brent price, analysts expect the impact on retail fuel to be muted. Vijay Valecha, Chief Investment Officer at Century Financial, noted that “Some of this month’s crude relief should carry through to next month’s petrol prices, but low product inventories and the market’s inherent stickiness mean the decline at the pump will likely be smaller and slower than the crude price swings imply.”— Vijay Valecha, Chief Investment Officer, Century Financial
Analysts weigh in on the likely cut
If July crude settles near $79 per barrel versus about $82 in June, the arithmetic points to a second consecutive cut at the pump. Valecha projected that Special 95 could fall to around Dh3.13 per litre and Super 98 to about Dh3.24 per litre.
By comparison, last month’s rates stood at Dh3.40 for Super 98, Dh3.29 for Special 95, Dh3.21 for E‑Plus and Dh3.60 for diesel. The modest expected dip follows a three‑month rise that began in April amid the Iran conflict.
Geopolitical factors keep the outlook uncertain
Madhur Kakkar, Founder and CEO of Elevate Financial Services, warned that “Brent enters August around $90 after a violent round trip, and that’s the right way to think about this market as it is trading headlines, not balances.” He added that any renewed escalation could push Brent back above $100 a barrel, which would reverberate through local fuel prices.
Market participants are also watching how major economies respond to oil price fluctuations, as higher energy costs could influence inflation and policy decisions across the region.
Frequently asked questions
Will UAE fuel prices drop in August?
Yes, analysts expect a modest dip in August, with a smaller reduction at the pump after two months of cuts.
How much could the price of Super 98 fuel fall in August?
Super 98 is expected to be around Dh3.24 per litre, according to the analysts' forecast.
What is the expected price for Special 95 fuel in August?
Special 95 is expected to be around Dh3.13 per litre, according to the analysts' forecast.
Why are fuel price cuts expected to be modest in the UAE?
Low product inventories and ongoing regional geopolitical tensions are cited as reasons the decline will be smaller and slower than crude price swings suggest.
