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Friday, September 02, 2022

Khaleej Times - UAE fuel prices at 6-month low: Grocery bills to come down by 15%

By Century Financial in Century in News

Khaleej Times - UAE fuel prices at 6-month low:...
Vijay Valecha, Special to Khaleej Times September 02, 2022

Grocery prices in the UAE are expected to come down by around 15 per cent following the reduction in retail fuel prices by the government for the second month on a trot.

Retail fuel prices in the UAE have dropped by over 27 per cent from their peaks in July after the UAE fuel committee announced slashed prices by 62 fils per litre for September.

The government reduced petrol prices by over 16 per cent on Wednesday (Aug 31) for September.

Retailers said consumers will definitely benefit from the trickle-down effect in the form of lower costs for transportation and logistics firms to transport goods within the country.

“Transportation costs will come down for retailers and suppliers and this will ultimately benefit consumers. When fuel prices had gone up in July, retail prices followed. So now fuel prices coming down, grocery prices will also drop by around 15 per cent,” said Dr Dhananjay Datar, chairman and managing director, Al Adil Trading.

He said the fuel prices drop is a very good sign of improvement in the economy and business. “Also, people will travel more within the country after fuel price reduction and this will generate more economic activity and give a fillip to the economic growth,” said Dr Datar.

Kamal Vachani, group director and partner of Al Maya Group, said freight rates are expected to come down after the government reduced the fuel

prices.

“Freight charges will come down with the reduction of retail fuel prices in the country and consumers will benefit from its trickledown effect. Reduction in retail fuel price was a very good decision to bring down the cost of living,” he said.

Vijay Valecha, chief investment officer at Century Financial, said the decline in fuel prices will undoubtedly bring down the grocery bill.

“Food prices could come down by 8-10 per cent by the end of the year. But be warned, the decline could be region specific. For example, food products from Europe could stay elevated while South Asia/Northern African ones might witness a decline. This is because the war-like scenario in Europe has resulted in high production costs,” said Valecha.

Century Financial CIO added that the depreciation of emerging market currencies against the US dollar will result in an additional cost benefit for the UAE customers because the UAE dirham is pegged to the greenback.

Source:
Khaleej Times
Zawya