Despite a global trend of declining crude oil prices, fuel prices in the UAE experienced fluctuations throughout 2025, ultimately ending the year higher than they began. Brent crude is down approximately 18% this year, and US WTI has fallen nearly 19%, according to Bloomberg data, leading to expectations of lower costs for consumers. However, the relationship between international oil benchmarks and local pump prices is complex, influenced by factors beyond just the cost of crude.
Recent data shows Super 98 started 2025 above Dh2.70 per litre, peaked in October at Dh2.77, and settled at Dh2.53 by January 2026. Similar movements were seen in other fuel grades, with Special 95, E-Plus 91, and diesel all experiencing volatility before a slight downward trend emerged at the start of the new year.
Understanding Fuel Prices in the UAE
Experts suggest that while global oil markets indicate a potential softening of prices in 2026, the extent to which this translates to lower costs at UAE petrol stations is uncertain. Vijay Valecha, chief investment officer at Century Financial, points to increased supply from OPEC+ and concerns about market oversupply as primary drivers of the current crude oil decline. These conditions, theoretically, would lead to cheaper petrol for end users.
However, the UAE Fuel Price Committee determines monthly fuel costs based on a wider range of criteria than just crude oil price. This includes international refined fuel benchmarks such as S&P Global Platts data, transportation expenses, operational costs, and specific regional economic conditions, creating a disconnect between crude costs and local pump prices.
The Role of Refining Costs
Refining margins played a significant role in the 2025 price increases, especially towards the end of the year. The International Energy Agency (IEA) reported that refinery outages and stricter fuel regulations implemented in Europe pushed refining margins to a three-year high. This increased the cost of producing petrol and diesel, counteracting the effects of falling crude prices.
Geopolitical Influences on Oil and Fuel
Geopolitical instability continues to present a risk to fuel price stability. Ongoing US sanctions on Russian oil, potential attacks on energy infrastructure, and evolving regulations in Europe can all disrupt the supply of refined fuels. Any such disruption has the potential to quickly inflate prices, as noted by Valecha.
George Pavel, general manager at Naga.com Middle East, agrees that the medium-term outlook for oil prices is weak, predicting a supply surplus of approximately 2.4 million barrels per day, exceeding demand growth of around 0.86 million barrels per day. If Brent crude were to average around $55 a barrel in 2026, as some analysts forecast, a decrease in petrol prices could materialize.
Potential Price Ranges for 2026
Based on current market conditions and historical trends, Valecha estimates that Special 95 could fluctuate between Dh2.45 and Dh2.68 per litre in 2026. Super 98 is projected to trade between Dh2.57 and Dh2.79 per litre. It’s crucial to understand these are indicative ranges, rather than firm predictions, and reflect the complexities of the global energy market.
A significant upward surge in prices would likely require an unforeseen major supply shock. This could include disruptions to vital shipping routes or substantial damage to energy infrastructure. However, absent such a shock, a more broadly contained price environment is anticipated.
Monitor changes in oil price trends, refinery output, and geopolitical developments for a better understanding of future fuel adjustments. Factors impacting the broader energy market, like global economic growth and shifts in transportation technology, will also contribute to the price equation.
Looking ahead, the outlook for fuel prices in the UAE is cautiously optimistic. While lower crude oil prices offer potential relief, the ultimate impact on consumer costs will depend on refinery performance, geopolitical stability and the monthly decisions of the UAE Fuel Price Committee. Drivers should expect continued volatility and a nuanced response to global oil movements. The next pricing decisions are scheduled for release by the committee at the close of January, and they will be closely watched for indications of the year’s overall trend.
– With inputs from Bloomberg.
Nivetha Dayanand is Assistant Business Editor at Gulf News, where she spends her days unpacking money, markets, aviation, and the big shifts shaping life in the Gulf. Before returning to Gulf News, she launched Finance Middle East, complete with a podcast and video series.
Her reporting has taken her from breaking spot news to long-form features and high-profile interviews. Nivetha has interviewed Prince Khaled bin Alwaleed Al Saud, Indian ministers Hardeep Singh Puri and N. Chandrababu Naidu, IMF’s Jihad Azour, and a long list of CEOs, regulators, and founders who are reshaping the region’s economy.
An Erasmus Mundus journalism alum, Nivetha has shared classrooms and newsrooms with journalists from more than 40 countries, which probably explains her weakness for data, context, and a good follow-up question.
When she is away from her keyboard (AFK), you are most likely to find her at the gym with an Eminem playlist, bingeing One Piece, or exploring games on her PS5.
