New UAE fuel prices to boost public transport

The UAE government's decision to deregulate petrol prices will increase residents' use of public transport

Oil prices have more than halved since June last year.
Oil prices have more than halved since June last year.

By Sarah Jacotine

The UAE government's decision to deregulate petrol prices and to link the price to global market movements will increase residents' use of public transport, according to a new survey.

The YouGov survey revealed that in response to the subsequent fuel price rise of more than 20% in the UAE, nearly a quarter (22%) of car owners said they will be increasing their use of public transport to avoid digging deeper into their pockets to pay for fuel.

In addition, 20% of those that own cars said they will reduce their commute by moving closer to work or public transport.

Another 18% claimed they will use other fuel saving techniques such as carpooling, using school buses and shuttles, whilst 15% said they will buy a smaller car.

The poll also showed that just under half (49%) of respondents said they will be more careful about travelling unnecessarily, such as taking frequent trips to malls and parks.

For those who won't be changing their travel habits, the largest proportion of car owners (41%) claimed they will be spending less in other areas of their household budget to cover the cost of fuel.

This was particularly the case among expats and income earners of up to $2,665 per month, YouGov said, adding that 17% of respondents said they will dip into their savings.

"The UAE once again is setting the path for the region by removing fuel price subsidies," said YouGov consumer research director, Wadii Eljourani.

"Whilst consumer spending will come under stress in the short term, the decision looks to have a positive impact on the use of public transport rather than cars," he added.

When it comes to the medium to long term impact of the rise in fuel prices, the survey highlighted concern about the cost of property in prime locations among residents as a whole with 71% of respondents fearing the cost of rental property in areas closer to public transport will rise significantly.

Sixty-five percent also said they feared higher fuel prices will impact the country's ability to attract and retain foreign talent to the region, especially those earning a low wage.

On the flip side, nearly half of respondents said they can see the fruits of the government's decision, with 46% believing it is necessary for the nation's long term economic sustainability.

"Understanding the long term impact the government's decision will have on the UAE's environment and economic sustainability reflects residents' loyalty to and confidence in its leadership.

"It also demonstrates their willingness to continue contributing to the country's long term development, even if they are here for the short term," added Eljourani.

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