Dubai: UAE drivers are entering 2026 with some relief at the pump after a year of sharp fuel price swings. January opened with noticeable drops across petrol and diesel grades, giving households a break after months of volatility and raising hopes that transport costs could ease.
Global oil trends also point in a favorable direction. Crude prices are on track for their biggest yearly drop since 2020, with Brent down around 18% and US WTI falling nearly 19%, according to Bloomberg. The International Energy Agency forecasts that supply growth will continue to outpace demand through 2026, creating a wider global surplus.
However, history shows that cheaper crude doesn’t always mean cheaper fuel at UAE stations.
What UAE Drivers Saw in 2025
Fuel prices bounced up and down throughout 2025 before easing into the new year.
- Super 98 started above Dh2.70 per litre, peaked at Dh2.77 in October, and dropped to Dh2.53 in January 2026.
- Special 95 ranged from Dh2.63 at its highest to Dh2.42 in early 2026.
- EPlus 91 fell to Dh2.34 after spending much of 2025 above Dh2.50.
- Diesel eased from highs near Dh2.85 to Dh2.55.
The trend for January is downward, but the key takeaway for UAE motorists is that petrol prices at the pump don’t always follow crude oil prices directly.
Why Cheaper Oil Doesn’t Always Mean Cheaper Fuel
Global crude oil prices may be heading down, but that doesn’t automatically mean lower petrol prices for UAE drivers.
Vijay Valecha, Chief Investment Officer at Century Financial, explains: “Global oil markets are pointing to softer prices next year, mainly because of higher supply from OPEC+ and concerns about oversupply in 2026. This would suggest that petrol prices could fall for consumers.”
However, fuel prices in the UAE depend on more than just crude. The UAE Fuel Price Committee sets prices every month based on international refined fuel benchmarks, like S&P Global Platts data, along with transportation costs, operating expenses, and regional market conditions.
This was evident in 2025. Even though crude prices fell during the year, petrol ended up more expensive than it started. Super 98 rose from Dh2.61 per litre in January to Dh2.70 in December, and Special 95 increased from Dh2.50 to Dh2.58 over the same period.
The lesson for UAE drivers is clear: global oil trends are important, but local factors ultimately determine what you pay at the pump.
Refining Costs and Geopolitics Still Affect Fuel Prices
Even if crude oil prices drop, other factors can keep petrol and diesel expensive. Refining costs are a big reason. The International Energy Agency (IEA) noted that refinery shutdowns and stricter fuel rules in Europe pushed refining margins to their highest in three years late last year. This made producing fuel more expensive, even as crude prices fell.
Geopolitics is another factor that can quickly change prices. US sanctions on Russian oil, attacks on energy infrastructure, or new restrictions in Europe can reduce the supply of refined fuel. Vijay Valecha explains, “Any threat of supply disruption from geopolitical events can quickly push prices higher.”
George Pavel, General Manager at Naga.com Middle East, adds that while the broader oil market looks weak, volatility is never far away. “Supply growth of about 2.4 million barrels per day is far ahead of demand growth at roughly 0.86 million barrels per day,” he says. “This keeps the medium-term trend bearish. If Brent averages around $55 per barrel in 2026, UAE petrol prices could decline.”
How High or Low Could Fuel Prices Go?
Looking at current trends and past patterns, Valecha estimates:
- Special 95 could trade between Dh2.45 and Dh2.68 per litre in 2026
- Super 98 may range from Dh2.57 to Dh2.79 per litre
He notes these are indicative ranges, not exact forecasts. Fuel prices in the UAE do not always follow crude oil exactly. A sudden spike in prices would likely need a major supply disruption, like damage to shipping routes or energy infrastructure. Otherwise, prices are expected to stay fairly contained.
What UAE Drivers Should Watch in 2026
The outlook is cautiously optimistic. Lower crude prices help, but refining costs, geopolitics, and monthly policy decisions will continue to decide what drivers actually pay.
As Pavel explains, “The market expects oversupply, but geopolitical risks could limit how far prices fall.”
For now, January’s lower prices give some relief, but whether this continues through 2026 depends on global fuel markets and how the UAE Fuel Price Committee adjusts prices month by month.
Editor-at-Large
A passionate writer in the lubricant industry, Awais Iqbal has been covering oils, greases, and industrial fluids since the start of his career. At 25, he’s already written for blogs, catalogs, and brand guides across the UAE. Awais’s insights help companies connect with their audience, and his clear, helpful writing style is trusted by brands in the region.
