Dubai, the city of dreams, is known for its cheap fuel prices. The UAE has one of the world's cheapest fuel prices.
The average price of a liter of unleaded petrol in Dubai is 0.78 AED (67 cents). However, in some other countries, it can be as high as 1.60 AED (120 cents) per liter!
Why does Dubai have such low fuel prices?
In the past few years, Dubai has been trying to reduce its dependence on oil and increase its focus on renewable sources of energy. As part of this plan, they are working towards making electric vehicles more popular in the city by providing incentives such as free parking and charging stations at malls and parking lots. They also have plans to make 75% of their fleet electric by 2030.
The UAE has long been known for its low fuel prices, but it's not just because of low taxes.
In fact, the country is one of the world's largest oil producers, yet its petrol prices are among the lowest in the world.
So why are fuel costs so cheap in Dubai?
According to a report by Reuters, there are several reasons why Dubai has some of the cheapest fuel prices in the world:
1. Lower taxes: Taxation on petrol is lower than other countries at around 50 per cent of average price per litre. This makes up about half of what you pay at the pump, compared to 60 per cent in many other countries around the world.
2. Accident compensation system: The UAE has an accident compensation system that means if someone causes an accident and their insurance doesn't cover it, then they'll have to pay up themselves or go bankrupt. The result is that people drive more carefully and fewer accidents occur which means lower insurance premiums and therefore lower fuel costs for everyone else.
3. Fewer vehicles on road: There are only 2 cars per 100 people in Dubai compared to 35 cars per 100 people in London. Book Kia Sonet for rent in Dubai for a better experince.
FAQ
1. What are the reasons for low petrol prices in Dubai?
There are many reasons for low petrol prices in Dubai. First and foremost, it is because of oil reserves found in UAE combined with its location on a major trade route between Asia and Europe. Oil companies can find many buyers for their product here as well as a large number of suppliers from whom they can get raw materials at reasonable prices. This makes it possible for them to sell petrol at low prices without compromising on quality or quantity.
2. How much does a litre of petrol cost?
A litre of 95 octane petrol will cost you about AED 3 while diesel would be around AED 2.50 per litre (as of March 2016). This is much lower than most other places in the world where even 100 octane costs around AED 5 per litre and diesel around AED 4 per litre (as of March 2016). However, if you want premium grade fuels
Why does Dubai have such cheap fuel?
The UAE has no income tax or VAT and the government uses oil revenues to fund its budget deficit and public services such as healthcare and education. The country also enjoys low labour costs compared to Western economies and Dubai has been spared from the worst effects of the global economic crisis due to its reliance on tourism rather than manufacturing industry.
