As retail fuel prices decline for the second straight month, grocery prices in the UAE are forecast to reduce by around 15%.
Since their July highs, retail fuel prices in the emirates have fallen by more than 27% after the fuel committee had slashed prices by 62 fils per litre for this month. The government cut the price of petrol by over 16% earlier this week.
Retailers in the UAE stated consumers will certainly benefit from the impact of reduced costs for transportation and logistics firms to transport goods within the country, Khaleej Times reports.
“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%,” said Dr Dhananjay Datar, chairman and managing director of Al Adil Trading.
He added that the decline in fuel prices is a good indication of economic improvement. “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.”
In addition, Kamal Vachani, group director and partner of Al Maya Group said they pass on benefits to consumers when fuel prices are lowered: “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.
Whereas Century Financial’s chief investment officer, Vijay Valecha said the fuel price reduction will definitely reduce grocery bills: “Food prices could come down by 8-10% 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,” he stated.