DUBAI, United Arab Emirates (AP) – 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.”