UAE fuel prices are at the highest level this month due to the deregulation in 2015. But fuel prices in the UAE are still low-priced compared to other countries. The reason: the UAE doesn’t impose taxes on fuel consumption. Astonishingly, fuel prices in Nordic states like Sweden and Norway are about 220-250% higher. Since fuel prices in the UAE are so affordable, the car enthusiast in you doesn’t need to worry about buying a Dubai used car and cruising down Emaar Boulevard to your heart’s content!
Vijay Valecha, Chief market analyst at Century Financial Brokers remarked that “Even though fuel prices have peaked since August 2015, UAE residents still pay less for the fuel as compared to the rest of the world.”
Fuel Prices in the US are about 25% higher. India’s fuel is more expensive by about 73%, Singapore’s fuel prices are about 142% higher, and the UK’s by 156% compared to the gasoline in the UAE. It’s mostly due to imposition of low taxation rates on petrol in the UAE as compared to the rest of the globe and also because the UAE has a large market overseas of crude oil and is one of the major exporters of it. Another reason for why the UAE citizens enjoy low taxation rates is because consumer price index comprises of 3-4% of the fuel price, which doesn’t increase the inflation rates to a great extent.
The UAE also imposes 5% VAT in contrast to 20% in the UK, whereas other countries press direct taxes on retail fuel prices. The local oil supply, transportation and refining costs are considerably cheaper in the UAE in contrast to importers or non-producers.
Additionally, lower taxation rates have also kept the fuel prices lower than other developing or developed markets. If economic conditions continue to stay pleasant, there is an expected spike in the consumption of industrial fuel moving forward. The rise is also expected as the UAE is one of the rapidly expanding countries in the region.
Mustafa Ansari, senior economist at Apicorp remarked that the UAE’s GDP is expected to rise from 1.5% in 2017 to 3.4% by 2022 and is the main catalyst for increase in demand for fuel, whereas GDP per capita will also spike by 16% by the year 2022 when compared to the 2017 stats. Coupled with this, the UAE’s population is also presumed to increase in the coming years which would most likely result in a high demand for both fuel and car purchases!
With prices this low, it’s time to buy a Dubai used car! Fill up the tank and hit the road! At CarSwitch.com, we take the pain out of the buying and selling car experience. Happy shopping and Happy cruising!