Saudi Press

Saudi Arabia and the world
Wednesday, Apr 08, 2026

High UAE gas prices stand out where cheap fuel was the norm

High UAE gas prices stand out where cheap fuel was the norm

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.”

At about $1.23 a liter, or $4.66 a gallon after July’s price rise, the unprecedented fuel cost in the UAE remains below the grim records reached in the United States and Britain as the war in Ukraine unleashes the biggest commodity shock in decades. But the region’s citizens have long considered cheap fuel a birth right. In Kuwait’s lavish welfare state, the cost per gallon is nearly four times less.

“Everyone is complaining,” said Emirati engineer Suhail al-Bastaki. “It’s just too expensive.”

Unlike for the rest of the world, the war is an unexpected boost to public finances for the UAE and its hydrocarbon-dependent neighbors. With the most diversified economy in the region, flashy Dubai has also benefited from an influx of wealthy Russians since the war.

But the recent price surge in the UAE has signaled the region is not immune to global market forces.

As pressure mounted last week, the UAE and Saudi Arabia allotted a combined $13 billion dollars in social spending for low-income citizens — an option clearly unavailable to the region’s less affluent economies such as Egypt and Lebanon, where the price of bread is surging and hunger is spreading.

Still in the UAE, where expats outnumber locals nearly nine to one, fuel price hikes are costliest for legions of workers from Africa, the Middle East and South Asia who power the economy. Inflation has cut into laborers’ already meager salaries, triggering a rare outburst of illegal strikes this spring.

Other Gulf Arab countries have also curbed state benefits to balance their budgets in recent years. But fearing backlash from angry consumers, none have gone as far as the UAE, where fuel prices are nearly double the average among Gulf Arab states.

The country can get away with this partly because the burden falls on its 9 million expat residents, experts say. Meanwhile, in Saudi Arabia — a country of 35 million, two-thirds of which are citizens — the government’s fuel price cap has kept inflation under control even as food costs have spiked.

“The impact is not really on the (UAE’s) local population,” said Nasser Saidi, an economist in Dubai. “They feel the fuel price increases, but they remain protected in terms of the social contract.”

The tiny Emirati population benefits from a generous welfare state that helps with everything: free education, health care and housing, grants for marriage, scholarships to foreign universities and well-paid government jobs.

That contract emerged across the region as rulers cashed in from the oil boom and distributed some of the bounty to citizens in exchange for political loyalty.

In times of windfall — and of discontent — governments know what to do: Spread the wealth. International benchmark Brent crude has surged some 50% over $100 a barrel since sanctions on Russia stoked fears of shortages.

“The outlays are a recognition that citizens know oil revenues are really high right now,” said Karen Young, a senior fellow at the Washington-based Middle East Institute. “This is a traditional mechanism of sharing.”

After the UAE’s latest fuel price rise, grumbling among Emiratis on social media and at traditional meeting spaces grew louder.

“People were suffering,” said Emirati social media influencer Hassan al-Amiri. “People think Emiratis are filthy rich but I don’t have an oil rig. Our needs are increasing.”

The grievances escalated to President Sheikh Mohammed bin Zayed Al Nahyan’s weekly majlis, a gathering at which any citizen may apply to voice concerns, said Emirati political expert Majed al-Raeesi.

Last week, Sheikh Mohammed unveiled plans to double the state’s social support for low-income Emirati families — classified as those who make less than $6,800 a month. The $7.6 billion package will cover 85% of recent fuel price hikes and 75% of food inflation, among other things like housing allowances and support for job-seekers.

The government portal received so many applications that it crashed.

“The leadership listened to the streets,” said al-Amiri, who faced some backlash from some Emiratis online over his complaints. Citizens are careful about expressing public criticism lest it be taken for dissent, which is outlawed.

From Saudi Arabia, the world’s second-biggest oil producer, King Salman announced $5.33 billion in direct cash transfers to citizens “to protect beneficiaries from the effects of of global price rises.”

But that help will not reach those who need it most. Desperation over the cost of living is growing among the region’s low-paid migrant workers.

Uber drivers and food delivery riders who pay for their own fuel in Dubai say they’re barely breaking even. Riders for two main delivery companies went on strike over their slim salaries in May — defying the UAE’s ban on labor protests.

Uber said it would raise fares as much as 11% for some trips to account for new gas fees in Dubai, but some drivers say that’s inadequate.

Muhammed, a 38-year-old Uber driver from Nigeria, was drawn to Dubai 12 years ago by the prospect of good pay. But now he has vanishingly little to send home to his wife and newborn daughter.

“I can’t stay here anymore,” he said, giving only his first name for fear of reprisals. “I work in Dubai 12 years and I have nothing.”
Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
King Street Aligns with Saudi Sovereign Wealth Fund to Expand Alternative Investments in Middle East
Attack on Saudi Arabia’s Jubail Petrochemical Hub Raises Global Supply Concerns
Debate Emerges Over Saudi Strategic Decisions as Gulf Cooperation Council Dynamics Come Into Focus
Saudi Arabia Expands Full Workforce Localisation to 69 Professions in Major Labour Reform
Emerging Alliance of Pakistan, Turkey, Egypt and Saudi Arabia Signals New Regional Power Dynamic Amid Iran Conflict
Iran Linked to Strikes Across Gulf States Following Refinery Attack Escalation
Saudi Arabia Voices Concern Over Fragile US–Iran Ceasefire Stability
Starmer Warns Sustained Effort Needed to Ensure US–Iran Ceasefire Holds
Saudi Arabia’s Key East-West Oil Pipeline Targeted Following Ceasefire Announcement
Iran Targets Saudi Arabia’s East-West Oil Pipeline in Escalating Regional Tensions
Trump Warns of Civilizational Stakes as Iran Halts Negotiations
Saudi Companies Expand Remote Work Measures Ahead of Iran-Related Security Concerns
Iran Warns of Strikes on Saudi Energy Infrastructure if US Targets Its Facilities
Iran Urges Civilians to Form Human Shields Around Nuclear Sites as Diplomatic Deadline Approaches
Saudi Arabia Raises Oil Prices to Record Premiums Amid Supply Pressures Linked to Iran Conflict
Key Saudi-Bahrain Causeway Closed Amid Heightened Security Concerns Linked to Iran
Formula One Calendar Gap Explained as Fans Await Next Grand Prix
Growing Strain on the Petrodollar System Comes Into Focus Amid Iran Conflict
Reported Strike on Saudi Arabia’s Jubail Complex Raises Global Energy Supply Concerns
FedEx Introduces New Digital Tool to Streamline Imports into Saudi Arabia
Iran Claims Strike on Saudi Arabia’s Jubail Petrochemical Complex Amid Rising Regional Tensions
Taiwan to Source Oil Shipments from Saudi Arabia’s Red Sea Ports
Saudi Arabia Evacuates Riyadh Financial District as Precaution Amid Regional Tensions
Saudi Arabia Balances Ambitious Economic Vision Amid Regional Tensions and Financial Pressures
Budget Saudi Arabia Reports Strong Full-Year 2025 Financial Performance
Saudi Arabia Expands Investment in Capcom With Stake Reaching Six Percent
Saudi Arabia Assesses Significant Economic Impact From Regional Conflict Involving Iran
US Beef Secures Expanded Market Access in Saudi Arabia
Jordan and Saudi Arabia Declare Absolute Solidarity in Response to Iranian Threats
Saudi Arabia Raises Oil Prices to Record Premium Amid Strong Market Demand
California’s Salton Sea Emerges as Strategic Lithium Hub for Clean Energy Future
Iranian Drone Strike on US Embassy in Saudi Arabia Reportedly Targeted Intelligence Facility
Saudi Deputy Foreign Minister Meets French Embassy Official to Strengthen Bilateral Engagement
Saudi Arabia Calls on United States to Seize Strategic Opportunity to Reshape Middle East
Dating Apps Surge in Saudi Arabia as Social Norms Rapidly Evolve Among Youth
Saudi Arabia Detains Over Fourteen Thousand Illegal Residents in Week-Long Enforcement Drive
Saudi Foreign Minister Engages in Diplomatic Talks with Pakistan, Kuwait and Latvia on Regional Developments
Saudi Arabia Intercepts Cruise Missile as Regional Tensions Intensify
Saudi Stock Market Edges Higher as Tadawul Index Records Modest Gain
Underlying Rivalry Between Saudi Arabia and UAE Persists Despite Temporary Calm
Saudi Arabia’s Non-Oil Sector Contracts in March as Regional Tensions Weigh on Business Activity
Saudi Arabia Unveils Ambition to Establish Prestigious Global Prize Rivaling the Nobel
Saudi Crown Prince to Engage Wall Street in Push for Investment and Economic Expansion
Iran Accuses Saudi Arabia and UAE After Downing of Chinese-Made Drone
Saudi Arabia Condemns Attack on Hospital in Sudan, Calls for Protection of Civilians
Coordinated Drone Strike Targets CIA Facility Within US Embassy in Saudi Arabia
Italy’s Meloni Prioritises Energy Security and Strait of Hormuz Stability During Gulf Tour
Uncertainty Emerges Over Timeline and Direction of Saudi Arabia’s Ambitious Ski Resort Project
UAE and Saudi Arabia Escalate Strategy with Drone Operations Targeting Iran
Trump Delivers Characteristic Remarks on Saudi Crown Prince Amid Intensifying Iran Conflict
×