Never in his three-decades of expatriate life did Mohammed Ashraf imagine that petrol prices in the United Arab Emirates (UAE) would surge to the levels as in India.
For years, fuel, in fact was cheaper than bottled water in the oil-rich Gulf.
Now with global uncertainty triggered by the Russian-Ukraine war or macroeconomic headwinds, retail petrol prices in the UAE have hit an all-time record touching Dh 4.66 (₹100) a liter in July. “And that is why I sold my Nissan Patrol car and went for a Tesla model,” says Dr. Ashraf, a medical practitioner in Dubai.
Amid rising petrol prices, a significant number of Non-Resident Indians (NRI) in the UAE are either switching to electric or hybrid cars to cut costs. “The demand for electric vehicles has risen exponentially. At times, we have to wait for more than an hour at the electric vehicle charging stations,” says Dr. Ashraf.
However, not all are wealthy enough to buy new electric cars, especially the Tesla models. “The middle-class NRIs are constrained to use carpooling services or commute by public transport,” MR Rajesh, a legal consultant in Abu Dhabi says.
Entrepreneur Harrison Albert feels that electric vehicles would be the future of driving for various reasons including the rising fuel prices. “Unofficial reports have estimated that the cost of a liter of petrol may even reach Dh 7 by year-end. So, governments globally are encouraging the electric vehicle industry,” he says, adding that a UAE company has opened a new electric vehicle manufacturing plant in Dubai Industrial City.
Many private companies had started feeling the pinch from as early as January 2022. “I used to fill the tank at Dh 200, but now I am paying around Dh 300. Our company is studying the prospects of selling the cars running on petrol and changing to hybrid soon,” says anthosh Raj, a Dubai-based business consultant.
Salahuddin Hassan, investor and CEO of ATC Group of Companies, says that establishment and administrative expenditures have increased proportionally to the rise in petrol prices. “The small and medium-sized enterprises are agonised over the hike and are facing tough challenges to complete ongoing projects,” he says, suggesting a fuel rationing system for small companies.
Binu Sankaran Kutty, a project director with a firm, says that frequent hikes in petrol prices have already impinged on the pockets of the households and contributed to inflation. “If the fuel price is raised by 50 fils (100 fils = 1 Dh), it is even reflected in the food bills at restaurants. We request the UAE government to intervene immediately to prevent the spiraling prices of essential commodities,” Mr. Kutty says.
IT and security advisor in Abu Dhabi Suresh Kumar says that the cost of an electric car was still quite significant considering the early stages of the industry. “Currently, only a handful of manufacturers are able to successfully sell electric cars without recalling. Many manufacturers have had hasty launches and then recall vehicles due to safety concerns which include battery explosion,” he says and added still, the outlook remains upbeat for electric cars.