TIMES.KY

Cayman Islands, Caribbeanand International News
Tuesday, Jun 06, 2023

High UAE gas prices stand out where cheap fuel was the norm

High UAE gas prices stand out where cheap fuel was the norm

Mere years ago, fuel was cheaper than bottled water in the oil-rich United Arab Emirates. Now, long lines snake outside gas stations on the eve of price hikes each month.
Fuel prices in the major OPEC producer, set in line with global oil price benchmarks, have soared over 70% since Russia’s invasion of Ukraine, accentuating differences with neighboring petrostates that heavily subsidize gasoline.

The contrast has stoked complaints among Emiratis who receive generous cradle-to-grave welfare and prompted the government to boost social spending for low-income citizens.

The UAE’s relaxing of fuel subsidies in 2015, which had been costing the government billions of dollars, put the country at the forefront of long-delayed fiscal reforms in the region as oil prices slumped. Even now, Gulf Arab rulers getting a windfall from sky-high oil prices know it can’t last forever, as the world’s economies move away from fossil fuels.

“The UAE is really standing out,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank. “Its policy focus remains firmly on reforms.”

At about $1.23 a liter, or $4.66 a gallon after July’s price rise, the unprecedented fuel cost in the UAE remains below the grim records reached in the United States and Britain as the war in Ukraine unleashes the biggest commodity shock in decades. But the region’s citizens have long considered cheap fuel a birth right. In Kuwait’s lavish welfare state, the cost per gallon is nearly four times less.

“Everyone is complaining,” said Emirati engineer Suhail al-Bastaki. “It’s just too expensive.”

Unlike for the rest of the world, the war is an unexpected boost to public finances for the UAE and its hydrocarbon-dependent neighbors. With the most diversified economy in the region, flashy Dubai has also benefited from an influx of wealthy Russians since the war.

But the recent price surge in the UAE has signaled the region is not immune to global market forces.

As pressure mounted last week, the UAE and Saudi Arabia allotted a combined $13 billion dollars in social spending for low-income citizens — an option clearly unavailable to the region’s less affluent economies such as Egypt and Lebanon, where the price of bread is surging and hunger is spreading.

Still in the UAE, where expats outnumber locals nearly nine to one, fuel price hikes are costliest for legions of workers from Africa, the Middle East and South Asia who power the economy. Inflation has cut into laborers’ already meager salaries, triggering a rare outburst of illegal strikes this spring.

Other Gulf Arab countries have also curbed state benefits to balance their budgets in recent years. But fearing backlash from angry consumers, none have gone as far as the UAE, where fuel prices are nearly double the average among Gulf Arab states.

The country can get away with this partly because the burden falls on its 9 million expat residents, experts say. Meanwhile, in Saudi Arabia — a country of 35 million, two-thirds of which are citizens — the government’s fuel price cap has kept inflation under control even as food costs have spiked.

“The impact is not really on the (UAE’s) local population,” said Nasser Saidi, an economist in Dubai. “They feel the fuel price increases, but they remain protected in terms of the social contract.”

The tiny Emirati population benefits from a generous welfare state that helps with everything: free education, health care and housing, grants for marriage, scholarships to foreign universities and well-paid government jobs.

That contract emerged across the region as rulers cashed in from the oil boom and distributed some of the bounty to citizens in exchange for political loyalty.

In times of windfall — and of discontent — governments know what to do: Spread the wealth. International benchmark Brent crude has surged some 50% over $100 a barrel since sanctions on Russia stoked fears of shortages.

“The outlays are a recognition that citizens know oil revenues are really high right now,” said Karen Young, a senior fellow at the Washington-based Middle East Institute. “This is a traditional mechanism of sharing.”

After the UAE’s latest fuel price rise, grumbling among Emiratis on social media and at traditional meeting spaces grew louder.

“People were suffering,” said Emirati social media influencer Hassan al-Amiri. “People think Emiratis are filthy rich but I don’t have an oil rig. Our needs are increasing.”

The grievances escalated to President Sheikh Mohammed bin Zayed Al Nahyan’s weekly majlis, a gathering at which any citizen may apply to voice concerns, said Emirati political expert Majed al-Raeesi.

Last week, Sheikh Mohammed unveiled plans to double the state’s social support for low-income Emirati families — classified as those who make less than $6,800 a month. The $7.6 billion package will cover 85% of recent fuel price hikes and 75% of food inflation, among other things like housing allowances and support for job-seekers.

The government portal received so many applications that it crashed.

“The leadership listened to the streets,” said al-Amiri, who faced some backlash from some Emiratis online over his complaints. Citizens are careful about expressing public criticism lest it be taken for dissent, which is outlawed.

From Saudi Arabia, the world’s second-biggest oil producer, King Salman announced $5.33 billion in direct cash transfers to citizens “to protect beneficiaries from the effects of of global price rises.”

But that help will not reach those who need it most. Desperation over the cost of living is growing among the region’s low-paid migrant workers.

Uber drivers and food delivery riders who pay for their own fuel in Dubai say they’re barely breaking even. Riders for two main delivery companies went on strike over their slim salaries in May — defying the UAE’s ban on labor protests.

Uber said it would raise fares as much as 11% for some trips to account for new gas fees in Dubai, but some drivers say that’s inadequate.

Muhammed, a 38-year-old Uber driver from Nigeria, was drawn to Dubai 12 years ago by the prospect of good pay. But now he has vanishingly little to send home to his wife and newborn daughter.

“I can’t stay here anymore,” he said, giving only his first name for fear of reprisals. “I work in Dubai 12 years and I have nothing.”
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

TIMES.KY
Close
0:00
0:00
Nvidia Joins Tech Giants as First Chipmaker to Reach $1 Trillion Valuation
Drone Attack on Moscow's Wealthiest Neighborhoods Suspected to be Launched by Ukraine
AI ‘extinction’ should be same priority as nuclear war – experts
Prominent Hacker Forum RaidForums Suffers Substantial Data Breach
Nvidia CEO Huang says firms, individuals without AI expertise will be left behind
WPP Revolutionizes Advertising with NVIDIA's AI Powerhouse
Two US Employees Fired For Chasing Robbers Out Of Store As They Broke ''Company Policy''
If you donated to BLM, you got played
Pfizer, the EU, and disappearing ink - Smoke, Mirrors, and the Billion-Dose Pfizer Vaccine Deal: EU's 'Open Secret
Actor Tom Hanks told Harvard University graduates to be superheroes in their defense of truth and American ideals, and to resist those who twist the truth for their own gain
The Sussexes' Royal Rebound: Could Harry and Meghan Markle Return to the UK?
A provocative study suggests: Left-Wing Extremism and its Unsettling Connection to Psychopathy and Narcissism
France Arrests 10 on Suspicion of Failing to Respond in Time to Migrant Drowning
Neuralink Receives FDA Approval for First-in-Human Clinical Study
Is Saudi Arabia the holiest place in the world? Ancient Hebrew Inscriptions from "The Mount Sinai Stand" Discovered in Saudi Arabia
Ukrainian Intelligence Official Admits to Assassination Attempts on Putin
Bernard Arnault Loses $11.2 Billion in One Day as Investors Fear Slowdown in US Growth Will Reduce Demand for Luxury Products
Russian’s Wagner Group leader: “I am not a chef, I am a butcher. Russia is in danger of a revolution like in 1917.”
TikTok Sues Montana Over Law Banning the App
Ron DeSantis Jumps Into 2024 Presidential Race, Setting Up Showdown With Trump
Last Walmart in North Portland Closing Down
Florida's DeSantis seeks to disqualify judge in Disney case
Talks between US House Republicans and President Biden's Democratic administration on raising the federal government's $31.4tn debt ceiling have paused
Biden Administration Eyeing High-Profile Visits to China: The Biden Administration is heating things up by looking into setting up a series of top-level visits to Beijing by top officials in the coming months
New evidence in special counsel probe may undercut Trump’s claim documents he took were automatically declassified
A French court of appeals confirmed former President Nicolas Sarkozy's three-year jail term for corruption and influence peddling
Debt Ceiling Crises Have Unleashed Political Chaos
Weibao Wang, a former software engineer at Apple, was charged with stealing trade secrets related to autonomous systems, including self-driving cars
Mobile phone giant Vodafone to cut 11,000 jobs globally over three years as new boss says its performance not good enough
Elon Musk compares George Soros to Magneto, the supervillain from the Marvel Comics series.
Warren Buffett Sells TSMC Shares Over Concerns About Taiwan's Stability
New Study Finds That Secondary Bacterial Pneumonia Is a Major Cause of Death in COVID-19 Patients Who Require Ventilator Assistance
The Prime Minister of St. Vincent and the Grenadines calls the British monarchy "an absurdity" he wants to remove in his lifetime
King Charles III being crowned.
'Godfather Of AI' Geoffrey Hinton Quits Google To Warn Of The Tech's Dangers
A Real woman
Vermont Man Charged with Stalking After Secretly Tracking Woman with Apple AirTag
Elon Musk Statements About Tesla Autopilot Could Be 'Deepfakes,' Lawyers Claim. Judge Evette Pennypacker Does Not Understand How Far and Advanced This Technology Became
Ukraine More Prepared for Counterattack as Reinforcements Arrive
UK Prime Minister Rishi Sunak and Italian Prime Minister Giorgia Meloni Discuss Migration, Defence, and Ukraine
AT&T's Successful Test of Satellite-Based Phone Call Raises Possibility of Widespread Coverage
CNN: "Joe Biden is asking for four more years — when 74% of Americans think the country is heading the wrong way“
Turkish President Recep Tayyip Erdogan Cuts Short Live TV Interview Due to Health Issue
US Congresswoman threaten Twitter Files journalist with arrest
Pulitzer Prize-winning journalist Seymour Hersh slams New York Times' pro-government stance and treatment of sources
Enough is enough: it's time to end the war in Ukraine. While Russia may be to blame for starting it, Russia is not the one refusing to stop it
Fox News Settles their case with Dominion Voting Systems for a staggering $787.5 MILLION
AG decries scapegoating and rushed lawmaking by government
The land of the free violence
21-year-old Massachusetts Air National Guard member Jack Teixeira has been arrested for leaking classified Pentagon Documents
×