Following the collapse of oil prices, gasoline in the UAE has become cheaper than some basic commodities including drinking water.
Reports say one liter of gasoline currently costs 40 cents. This is while the price of 1,5 liters of water is $2.15.
The price of one liter of soda is 80 cents and six eggs cost $1.06, reported the UAE’s local newspaper The National.
In the last year since January 2015, Brent oil became 30 percent cheaper — the prices dropping from $52 to $35 dollars for a barrel. The reasons behind this major decline include the more moderate growth of China’s economy, OPEC’s policy of increasing oil output, and the lifting of anti-Iran sanctions, reported Russia’s Sputnik news agency.
UAE Energy Minister Suhail Al Mazrouei believes the global oversupply of crude will decline this year, even after Iran adds an expected 500,000 barrels per day in oil output.
“Iran’s possible production increase of 500,000 barrels per day this year won’t be enough to meet the expected demand,” Sputnik quoted Minister Al Mazrouei as saying. “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.”
Iran saw a series of economic sanctions that had been put into place against it for multiple years lifted in mid-January. A key theme in the sanctions was a ban on foreign investments in the country’s oil and gas projects as well as an embargo that restricted the country’s oil sales to global markets to around 1 million barrels per day (bpd).
With the sanctions now lifted, the country is preparing to surge its production of oil by at least 500,000 bpd in the first stage and another 500,000 bpd in the next stage.