UAE: Everyday goods more costly than petrol

Petrol prices in the UAE have fallen for the sixth month in a row, leaving many everyday products costing more than filling up a tank.

A litre of "special" now costs Dh1.47 ($0.40), of "super" Dh1.58 ($0.43) and of diesel Dh1.37 ($0.37).

"It is now more expensive to pour milk on your morning cereal than it is to put petrol in your car," said the UAE daily The National.

A litre of milk in the emirates costs around Dh5.50 ($1.50), and a litre and a half of imported mineral water costs around Dh7.90 ($2.15).

The fall in petrol prices is due to a continuing decrease in the price of crude oil, which has so far benefited motorists.

Yasmine Saade, who drives a Toyota Prado, told The National she was very happy with prices at the pump this week. Usually a full tank costs her about Dh135 ($37), but this week it was Dh115 ($31).

However, there are concerns about the wider economic impact of the drop in oil prices.

Earlier this month, stock markets in Gulf states were in panic as oil prices and increasing tensions between Saudi Arabia and Iran dented investors' confidence in the region.

However, UAE Energy Minister Suhail Al Mazrouei said he expected the global oversupply of crude to decline this year, even after Iran ramps up production.

It is now more expensive to pour milk on your morning cereal than it is to put petrol in your car

"Iran's possible production increase of 500,000 barrels per day this year won't be enough to meet the expected demand," said Mazrouei.

"It's difficult to see where the new oil supply is coming from this year to fill the expected annual demand increase of at least 1.3 million barrels a day," he added.

Kuwait has forecast a never-before-seen budget deficit for the upcoming fiscal year, due to the recent sharp decline in oil revenues.

On 21 January, Kuwait's Emir Sheikh Sabah al-Ahmad al-Saba said heavy subsidies on fuel and power in Kuwait were to be cut in a bid to offset a drop in oil revenues.

Earlier this month, Qatar also increased petrol prices at the pumps by a third to cope with another looming deficit, as oil prices fell to their lowest in 12 years.