Petrol, diesel to be cheaper next month

MINISTRY ANNOUNCES FIRST DECREASE IN FUEL PRICES THIS YEAR

Petrol and diesel will be cheaper next month, marking the first decrease in 2017.

According to the retail fuel prices per litre for April announced by the Ministry of Energy on Tuesday, Super 98 will cost Dh1.95, a decrease from Dh2.03 in March, Special 95will cost Dh1.84, down from Dh1.92 and E Plus-91 will cost Dh1.77, down from Dh1.85. The diesel price has been reduced to Dh1.95 per litre from Dh2.02 in March, the Ministry of Energy said in an emailed statement.

On Tuesday, Brent rebounded from testing a support of $50 a barrel on Monday. Brent crude was up 1.18 per cent higher at $51.35 per barrel, while Nymex West Texas Intermediate was up 1.22 per cent at $48.31.

Both Brent and WTI jumped over 20 cents a barrel after it emerged Libya’s oil output had fallen by roughly a third, or 252,000 barrels per day (bpd) because armed factions blocked production at the Sharara and Wafa oil fields.

The contracts also rose after Iranian Oil Minister Bijan Zanganeh said the global oil cut agreement between the Organisation of Petroleum Exporting Countries (Opec) and other major producers was likely to be extended.

A record amount of US crude oil has found its way to Asia and other destinations this year and more is expected to be shipped out as traders take advantage of arbitrage opportunities by sending excess US crude into regions where it can find buyers.

Till February, oil prices had been on a gaining streak on the back of an agreement between Opec and non-Opec members to cut production.

The agreement, which is valid for six months, came into effect from last January 1 with most of the Opec member countries adhering to the pact to reduce output with Saudi Arabia cutting the most, followed by Iraq, the UAE and other Gulf countries.

And efforts are on to extend the cut for another six months to cut swelling inventories, and help raise prices. Ole Hansen, head of commodity strategy at Saxo Bank said “considering that anything but an extension could have very negative price consequences”.

Saxo Bank expects Brent crude to establish a new lower range between $50-$54. “A break below however could see it challenge $46,” Hansen said.

All eyes will be on Opec’s meeting on May 25, when the oil producers will decide on the extension of an output cut.