The UAE’s ministry of energy announced that it would lower domestic prices for gasoline and diesel in January, making a long anticipated move given the plunge in Brent crude, reported Gulf News. Petrol prices promptly dropped by 6% and diesel by 12% after the announcement.
Since July, the UAE has pegged domestic fuel prices to global benchmarks, with monthly adjustments, in an effort to phase out fuel subsidies. The price decrease is believed to have a positive effect on the economy as prices of goods and services will subsequently go down too, the report reads. Experts told Gulf News that low prices should continue as long as there is an excess of supply in the market, however, a drop below $30 would be unexpected.
In other developments, Dubai announced plans to raise state spending by 12% in 2016, despite declining oil revenues, in an attempt to maintain growth rates, informed Reuters. Dubai anticipates to increase tax collection revenues that may balance the expenditure. The new budget will enjoy $12.6b in extra finances, most of which will go towards wages, salaries, and new jobs followed by infrastructure, transport, and economic development and then debt servicing.